September 20, 2011, 11:03 am
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 …