Yes, yes. Your 401K is in the toilet again and it’s all Europe’s fault. How could they have possibly unified their currency without unifying their fiscal policy, etc., etc. But the truth is, Greece’s debt is a drachma in the bucket compared to the U.S.
Take a look at total indebtedness vs. GDP. In Greece, it’s about 12 times more debt than GDP. In the US, with $211-trillion in debt, that’s about 14 times our GDP.
In other words, the U.S. is in worse long-term fiscal shape than Greece. According to Boston University economist Laurence J. Kotlikoff:
The financial sharks are circling Greece because Greece is small and defenseless, but they’ll soon be swimming our way
To grasp the magnitude of our nation’s insolvency, consider what tax hikes or spending cuts are needed to eliminate our fiscal gap. The answer is an immediate and permanent 64-percent increase in all federal revenues or an immediate and permanent 40-percent cut in all federal noninterest spending.
Needless to say, no such thing is even up for discussion since it would involve, among other things, an immediate end to the trillion plus dollars cost of the wars in Afghanistan and Iraq. Although the Obama deficit-reduction plan, unveiled Monday, relies on the end of these wars, as well as tax increases, to trim the debt by $3-trillion over the next 10 years, this is unlikely to get approved and, sadly, even if it did, it would also be a fairly minimal reduction in total debt, kind of like paying that minimal monthly balance on your credit card but accruing more and more debt through interest and fees.
And with Rep. Paul Ryan calling Obama’s plan to tax the wealthiest Americans “class warfare” and the business propagandists arguing that the wealthy already pay far more than their share of taxes, there is really little chance that a “millionaire tax” will ever be put into law.
Which means that we will continue to be number one in debt. Yeah, baby, take that, Greece. Of course there is one arena in which we cannot even compete with Greece: protest. Few American citizens seem to understand that business as usual will lead to an even bleaker future than the present.
Of course, there are hundreds of protesters camping at Wall Street right now. The protest, in its third day, began attracting ordinary Americans on Saturday. With signs like “End the Oligarchy” and “Wall Street is Our Street,” the protesters began with teach-ins and even has possible presidential candidate and proletariat comedian Roseanne Barr as one of its campers.
The protesters, organized by Adbusters and Anonymous, are
calling upon President Barack Obama to create a Presidential Commission ‘tasked with ending the influence money has over our representatives in Washington.’ Tired of policies perceived as putting profit over the basic needs of the American people, Occupy Wall Street was conceived as a way to communicate this to the highest levels of government.
But rather like Obama’s deficit-reduction plan, the protest seems doomed to being just another half-hearted attempt to stop the U.S. economy from collapsing under the weight of extreme income inequality. No matter how many Americans may understand that corporate interests are not the same as their interests, the protest is unlikely to attract the kind of crowds that gathered in Greece this summer to protest their government’s indifference to ordinary citizens.
Indeed, if there is anything at all to learn from Greece’s role in the collapse of the euro, it is that debt will only make you poorer. So no matter how much it has made a small percentage of bankers richer, the end result will always be a debtocracy.
