Could America Become the Next Greece?

[MatSm]

The Congressional Budget Office (CBO) estimates in its alternative fiscal scenario that U.S. publicly held debt will grow to 180 percent (exceeding the current Greek-level) by 2039. Yet U.S. debt is already in the danger zone, dragging down present-day growth prospects.

http://www.nationalinterest.org/feature/scary-thought-could-america-become-the-next-greece-13341

Personally I think that it's an appropriate comparison. Our present President has continued to spend, tax, and borrow as his predecessor. Poverty and the federal welfare state continue to swell. "Compassionate conservatism?" "Social justice redistributive policies?" Both are roads to fiscal failure. One in five in America are in poverty, ninety three million Americans no longer work.

 

[fskimospy]

Nope. Greece borrowed money in currency it doesn't print. The US borrows money in currency it prints.

Because of that simple fact, anyone who says the US might become like Greece is either clueless or pushing an agenda.

 

[halik]

No, because people here actually pay taxes. What gives currency value is the ability to tax.

 

[Sulaco]

Personally I think...

No one cares what you think when you're wrong.

Being a transparent troll doesn't help your cause either, but the ignorance is what's really holding you back. Try not sucking so much.

 

[Londo_Jowo]

The real question is "Could MatSm go a day without posting a stupid thread?? "

 

[Brovane]

The Congressional Budget Office (CBO) estimates in its alternative fiscal scenario that U.S. publicly held debt will grow to 180 percent (exceeding the current Greek-level) by 2039. Yet U.S. debt is already in the danger zone, dragging down present-day growth prospects.

http://www.nationalinterest.org/feature/scary-thought-could-america-become-the-next-greece-13341

Personally I think that it's an appropriate comparison. Our present President has continued to spend, tax, and borrow as his predecessor. Poverty and the federal welfare state continue to swell. "Compassionate conservatism?" "Social justice redistributive policies?" Both are roads to fiscal failure. One in five in America are in poverty, ninety three million Americans no longer work.

Hot tip, The legislative branch spends, taxes, and borrows not the Executive branch. Stop watching fox news for all your information.

 

[VirtualLarry]

Hot tip, The legislative branch spends, taxes, and borrows not the Executive branch. Stop watching fox news for all your information.

Hot tip: the Deficit is not the same thing as the Debt. Bazinga!

Edit: Try spending 3% more on your credit card every month than you pay off. Then tell me what your total (including interest) is in 20, 50 years. Hint: It's not pretty.

 

[fskimospy]

Hot tip: the Deficit is not the same thing as the Debt. Bazinga!

Edit: Try spending 3% more on your credit card every month than you pay off. Then tell me what your total (including interest) is in 20, 50 years. Hint: It's not pretty.

Now consider if you were charging all your purchases in VirtualLarrybucks that you print in yoir basement as opposed to dollars.

Then make yourself immortal and give yourself a 3% raise every year. Then realize why personal finance analogies for governments are bad.

 

[Paratus]

Now consider if you were charging all your purchases in VirtualLarrybucks that you print in yoir basement as opposed to dollars.

Then make yourself immortal and give yourself a 3% raise every year. Then realize why personal finance analogies for governments are bad.

It's like the climate change threads. Same wrong ideas keep coming over and over and....

 

[brycejones]

The real question is "Could MatSm go a day without posting a stupid thread?? "

this

 

[sm625]

Greece is in the mess it is in because it cannot issue currency. The US is nothing like Greece. The US can print trillions and give it to the rich, and the only negative side effect is that the money supply becomes diluted. So the poor end up spending $3 a gallon on gas and $4 a gallon on ground beef. But they dont care because the government can placate them with EBT cards, and issue treasuries to pay for them. Then the central bank can print money to buy the treasuries. Since the dollar is a reserve currency, we export a great deal of this currency dilution to countries like Greece. Japan, China, Britain, Germany... they all do this same thing. Print money and export their inflation. It is such a great racket.

 

[Brovane]

Hot tip: the Deficit is not the same thing as the Debt. Bazinga!

Edit: Try spending 3% more on your credit card every month than you pay off. Then tell me what your total (including interest) is in 20, 50 years. Hint: It's not pretty.

What is your point? I am pointing out that Legislative branch does the budget and spends the money. Do you disagree with this?

 

[fskimospy]

It's like the climate change threads. Same wrong ideas keep coming over and over and....

I guess that's what comes from echo chambers. I mean if you hear something enough you start to assume it's true.

At least in this case it's a new person with the same old wrong ideas. (I think?) In the climate threads it's the same people. That's far more discouraging, haha.

 

[dank69]

Greece is in the mess it is in because it cannot issue currency. The US is nothing like Greece. The US can print trillions and give it to the rich, and the only negative side effect is that the money supply becomes diluted. So the poor end up spending $3 a gallon on gas and $4 a gallon on ground beef. But they dont care because the government can placate them with EBT cards, and issue treasuries to pay for them. Then the central bank can print money to buy the treasuries. Since the dollar is a reserve currency, we export a great deal of this currency dilution to countries like Greece. Japan, China, Britain, Germany... they all do this same thing. Print money and export their inflation. It is such a great racket.

I often buy beef by the gallon.

 

[Phokus]

The Congressional Budget Office (CBO) estimates in its alternative fiscal scenario that U.S. publicly held debt will grow to 180 percent (exceeding the current Greek-level) by 2039. Yet U.S. debt is already in the danger zone, dragging down present-day growth prospects.

http://www.nationalinterest.org/feature/scary-thought-could-america-become-the-next-greece-13341

Personally I think that it's an appropriate comparison. Our present President has continued to spend, tax, and borrow as his predecessor. Poverty and the federal welfare state continue to swell. "Compassionate conservatism?" "Social justice redistributive policies?" Both are roads to fiscal failure. One in five in America are in poverty, ninety three million Americans no longer work.

1. Greek people don't pay their taxes. For example, i was reading about how property owners can just pay off the local tax authorities for 25% of their property tax rate rather than pay their actual taxes

2. Unlike Greece, the united states is both a monetary and fiscal union, thus will never be constrained in their monetary policy like Greece was.

So no, America will never be greece.

Learn economics before spouting nonsense.

 

[brycejones]

I often buy beef by the gallon.

Pink slime FTW

 

[thraashman]

The real question is "Could MatSm go a day without posting a stupid thread?? "

I'd vote "No" in that poll.

 

[Londo_Jowo]

I'd vote "No" in that poll.

You would win. He already started another useless/stupid thread.

http://forums.anandtech.com/showthread.php?t=2439530

 

[Darwin333]

Now consider if you were charging all your purchases in VirtualLarrybucks that you print in yoir basement as opposed to dollars.

Then make yourself immortal and give yourself a 3% raise every year. Then realize why personal finance analogies for governments are bad.

The law of exponents doesn't apply to governments then, at least ones that can print their own money. Is that what you are saying?

It doesn't matter though, if we pulled out the deficit spending we would reduce GDP by at least an equal amount and no politician is going to do that when they can kick the can to the next guy.

 

[fskimospy]

The law of exponents doesn't apply to governments then, at least ones that can print their own money. Is that what you are saying?

I'm saying that the results of that for an individual and for a government issuing debt in their own currency are so completely different that the comparison between them is pointless.

It doesn't matter though, if we pulled out the deficit spending we would reduce GDP by at least an equal amount and no politician is going to do that when they can kick the can to the next guy.

Not true at all, actually; that's not how the math works. There's fiscal multipliers to consider, the effects of offsets through monetary policy, etc. While I agree that right now closing the deficit is foolish without letting monetary policy return to more normal levels, that certainly doesn't always (or even often) hold true.

 

[Paratus]

Greece is in the mess it is in because it cannot issue currency. The US is nothing like Greece. The US can print trillions and give it to the rich, and the only negative side effect is that the money supply becomes diluted. So the poor end up spending $3 a gallon on gas and $4 a gallon on ground beef. But they dont care because the government can placate them with EBT cards, and issue treasuries to pay for them. Then the central bank can print money to buy the treasuries. Since the dollar is a reserve currency, we export a great deal of this currency dilution to countries like Greece. Japan, China, Britain, Germany... they all do this same thing. Print money and export their inflation. It is such a great racket.

Move back to whatever country you came from. Here in Merica we don't buy our beef by the gallon we buy it by the alternator.

 

[glenn1]

We are already becoming like Greece in the sense that our debt service costs are going up in parabolic fashion and that will likely bite us in the ass later. In the larger sense of being insolvent like Greece then technically no since the dollar is a fiat currency we can control the issuance of. We could just print off more even though it's effectively devaluing the current money supply. In the practical sense yes we could become like Greece, because we have no God-given right to either current account deficits or external debt. Having the Fed create mountains of "money" from nothing doesn't oblige our potential trade partners to accept dollar currency, dollar denominated debt, or actual U.S. physical assets like land in payment of goods received.

 

[piasabird]

The answer is no. If the USA suffers a financial crisis, who would bail us out? China?

 

[theeedude]

No. Us borrows in its own currency. Japan has 240% debt to GDP, worse than Greece, but can borrow at 0.5% interest for 10 years.

 

[Fern]

Could America Become the Next Greece?

No, not exactly for the reasons already posted above.

However, we may face problems similar to the EU/Greece problem.

We have a few states in poor fiscal condition. Like Greece, they may need bailing out. http://mercatus.org/statefiscalrankings

So, the analogy is more like USA = EU; state = Greece.

Fern