The eurozone continues to limp along, but a financial crisis and sharp recession there remain the greatest threat to U.S. prosperity outside of our own fiscal follies. Yet while many Americans are sure Europe has done something stupid, they really don't understand what is happening across the Atlantic or how the outcomes would differ if the same thing had happened here.

A key difference is that we are a federal nation of 50 states, while the EU is a federation of 25 nations, of which 17 have ceded control over monetary policy to the European Central Bank.

Despite this constitutional difference, many economic policies are similar, at least in their aims.

Consider Greece and Italy, two countries that have government programs with high benefits relative to the taxes imposed to support them.

The result is budget deficits that add to the national debts. When those debts become so large that the governments cannot service them, they may seek bailouts from other eurozone countries.

Voters in other countries resent their tax dollars going to support welfare or retirement programs that are more generous, at least relative to taxes paid, than they themselves enjoy.

In our country, there is an analogous situation.

In some states, spending on social welfare programs is much higher, relative to taxes paid, than in others. Yet the fiscal outcome is different.

Consider Social Security in states like Alabama, Mississippi, Arkansas and Idaho.

These states have low per-capita incomes and quite unequal income distribution. Most people don't pay a great deal in FICA taxes for Social Security and Medicare.

But benefits paid from these programs are not in direct proportion to amounts paid in.

There is an ongoing, long-term flow of funds from high-income states to lower-income ones.

Yet, unlike Germans and Finns subsidizing Greek or Portuguese retirement programs, long-term fiscal transfers from richer to poorer regions of the United States are not politically contentious. We have a sense of shared identity that is still lacking in the eurozone.

Now consider how bank bailouts play out regionally in the eurozone versus our country. The citizens of Finland, the Netherlands and Germany are all concerned that their tax dollars will flow, directly or indirectly, to bail out banks in Greece, Portugal, Ireland and Spain.

Ireland and Spain stand out as two countries that managed their fiscal affairs prudently, with near-balanced budgets and much lower debt-to-GDP ratios than the United States. They got into trouble because their private banking systems went on property-lending binges that resulted in huge loan losses as the world economy soured after 2008. In both cases, the national governments stepped in to bail out their banking systems at the cost of ruining their own finances.

Here in the United States, we had a similar situation in the late 1970s and early 1980s as savings and loans made excessive risky property loans. Many eventually went broke and the cost to the U.S. Treasury of cleaning up the mess was large.

There were busted S&Ls in every state, so little attention was paid to the exact distribution of problems. But when the dust had settled, 75 percent of Treasury outlays had gone to clean up S&Ls operating in one state, Texas.

If we were a confederation of independent nations like the European Union, Texas would have faced a daunting bill. But we are one nation, and so the issue of S&L folly having been particularly concentrated in one state has never been an issue.

Yes, Texas had no regulatory power over the S&Ls. It could not tell them to stop making dangerous loans. And it had no control over general credit availability via the money supply or interest rates.

Spain and Ireland did retain regulatory powers over their nation's banks even after joining the euro. But, like Texas, they had virtually no control over the money supply or interest rates. It would have been hard for them to have crimped lending when these key policy variables were managed in Frankfurt.

The EU taken as a whole is a large economy. But it is not yet a true “national” economy. The United States settled analogous issues when we adopted our Constitution to replace the Articles of Confederation more than two centuries ago. Whether the Europeans will ever do the same is unclear.

Economist Edward Lotterman teaches and writes in St. Paul, Minn. Write him at ed@edlotterman.com.