We’re Not Greece
By PAUL KRUGMAN
NYT
It’s an ill wind that blows nobody good, and the crisis in Greece is making some people — people who opposed health care reform and are itching for an excuse to dismantle Social Security — very, very happy. Everywhere you look there are editorials and commentaries, some posing as objective reporting, asserting that Greece today will be America tomorrow unless we abandon all that nonsense about taking care of those in need.
The truth, however, is that America isn’t Greece — and, in any case, the message from Greece isn’t what these people would have you believe.
So, how do America and Greece compare?
Both nations have lately been running large budget deficits, roughly comparable as a percentage of G.D.P. Markets, however, treat them very differently: The interest rate on Greek government bonds is more than twice the rate on U.S. bonds, because investors see a high risk that Greece will eventually default on its debt, while seeing virtually no risk that America will do the same. Why?
(More here.)
NYT
It’s an ill wind that blows nobody good, and the crisis in Greece is making some people — people who opposed health care reform and are itching for an excuse to dismantle Social Security — very, very happy. Everywhere you look there are editorials and commentaries, some posing as objective reporting, asserting that Greece today will be America tomorrow unless we abandon all that nonsense about taking care of those in need.
The truth, however, is that America isn’t Greece — and, in any case, the message from Greece isn’t what these people would have you believe.
So, how do America and Greece compare?
Both nations have lately been running large budget deficits, roughly comparable as a percentage of G.D.P. Markets, however, treat them very differently: The interest rate on Greek government bonds is more than twice the rate on U.S. bonds, because investors see a high risk that Greece will eventually default on its debt, while seeing virtually no risk that America will do the same. Why?
(More here.)
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1 Comments:
you're right, mr krugman, we're not greece....not yet. but we will be if we don't stop the policies that are bankrupting the private sector from being able to pay for the trillions in liabilities that are out there in local, state and federal entities.
you cannot borrow your way out of debt, you cannot spend your way out of deficit and you cannot tax your way in to prosperity.
Read the above sentence 1000 times. Memorize it. Learn it. Write about it. Tell your friends about it. Write your Congressman about it. Teach it in your classes. If we don't get a handle on our government spending, we will become just like Greece and Europe. At least Obama is right about one thing - we are on an unsustainable path. Why Krugman continues to deny the overwhelming evidence that the policies he espouses are a total failure is beyond me. If they'be been tried anywhere, it's been Europe. Does anyone really think that the Europe model is the way to go anymore?
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