Greece Gives Preview of America’s Future?

Could be.

Many of the same risky financial practices that now imperil the Greeks were at the center of the all-too-recent U.S. meltdown.

As with Greece, America’s national debt has been growing by leaps and bounds over the past decade, to the point where it threatens to swamp overall economic output. And in the U.S., as in Greece, a large portion of that debt is owed to foreign investors.

Not good, if these debt holders begin to wonder if they’ll be paid back. A foreign flight from U.S. Treasury securities could sow financial chaos in the United States, as happened when many investors lost faith in Greek bonds.

It’s something that could affect all Americans. The U.S. has never defaulted on a debt, and even the hint of such a possibility could send interest rates soaring and choke off a fragile recovery.

1. How many people will lose there houses when taxes are raised to pay for healthcare and the debt?

   Posted by (JavaScript must be enabled to view this email address) on March 11, 2010 at 1316 hrs




2. My question is where do the Greeks that are protesting think the money should come from? Do they think they can just keep getting paid the same and keeping all the same benefits, while ever increasing their national debt? Do they think they are American public employees?

   Posted by (JavaScript must be enabled to view this email address) on March 11, 2010 at 1338 hrs




3. Reaper,

   My sociological explanation is that the Greeks have been indoctrinated into socialism and consequently believe they are entitled…

   Posted by (JavaScript must be enabled to view this email address) on March 11, 2010 at 1341 hrs




4. A default can only occur when a nation’s debt is denominated in another country’s currency.

   Carter experimented with this (using Deutschmarks) in the ‘70s and and the idea died a hasty death.

   The debt of the United States is denominated in USD and therefore we cannot possibly default.

   We could print more money thereby monetizing the debt - but that is not a default.

   Relative to our GDP the current debt load is significantly smaller than that of post-WWII. 

   We are a nation of innovators and entrepreneurs.  Just as we have at other times in our history we can grow our way out of this.

   It is also important to note that our carrying costs for the interest on our debt are (in percentage terms of our ability to pay the interest) lower now than they have been historically.

   Posted by Swamp Gas on March 11, 2010 at 1433 hrs




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   Posted by (JavaScript must be enabled to view this email address) on March 11, 2010 at 1510 hrs




6. swamp gas -

   how much government debt per person do you think is reasonable?

   Total government debt is an est. $240,000 per person and we are technically bankrupt.

   Or, is your fantasy that the Greek god will save us in 2012?

   Posted by (JavaScript must be enabled to view this email address) on March 11, 2010 at 1648 hrs




7. ofr…

   Where in my post did I mention anything about a reasonable amount of debt?

   All I did was state some facts.

   And who said anything about a Greek God?

   Posted by Swamp Gas on March 11, 2010 at 1905 hrs




8. SwampGas beat me to it.  The obvious difference between the Greeks and us is that the US borrows in its own currency whereas the Greeks borrow in a multinational currency that they have very little influence over.  The US can always inflate the currency and thus depreciate the debt.  You don’t need to worry about a default as long as the treasury can borrow in dollars.  Inflation worries are another story, obviously.  Fortunately for the government, the rate they pay on the debt is not much more than the inflation rate. 

   As far as what is a reasonable amount of debt?  Who knows.  I think it depends what they do with the money.  Seeing as how they’re essentially taking money from future generations, if they take the money and spend it on infrastructure or useful scientific research - the kind of thing that will benefit future generations - then I’d be willing to accept a lot more of it then if they issue the debt to finance foreign wars or entitlements for old folks.

   Posted by (JavaScript must be enabled to view this email address) on March 12, 2010 at 2044 hrs