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No, the United States Will Never, Ever Turn Into Greece
The Atlantic ^ | 03/08/2013 | Matthew O' Brien

Posted on 03/08/2013 7:10:03 AM PST by SeekAndFind

Have you read the opinion section of any newspaper in the last three years? Yes? Then there is a better-than-even chance you have come across some impressive-sounding analyst predict that the United States is "turning into Greece."

Maybe it's been a while, so we'll recap. The short version of this story is that we'll spend ourselves into bankruptcy. The longer version says that too much public debt makes markets nervous. Nervous markets demand higher interest rates. Higher rates mean higher deficits and lower growth, both of which mean more burdensome debt. More burdensome debt makes markets even more nervous. And around and around we go in a vicious circle into insolvency.

As far as scare stories go, this is pretty damn scary. It's also just a story. Rates haven't risen as debt has the last few years; they have fallen to historic lows. Of course, that hasn't stopped the Greek chorus from predicting that the economy is going to Hades. But when? Is it when debt reaches 100 percent of GDP? Or 90 percent, as Carmen Reinhart and Kenneth Rogoff famously argued?

What about 80 percent?

That was the bright white line drawn in a recent paper by David Greenlaw, James Hamilton, Peter Hooper and Frederic Mishkin. Greenlaw & Co. ran regressions on 20 advanced economies from 2000 to 2011 to see if there's a relationship between a country's borrowing costs one year and its gross debt, net debt, and 5-year current account average the previous one. (Glossary Interlude: Gross debt refers to the total amount of debt, including debt the government owes to itself. Net debt is the amount held by the public, minus any government assets. Current account is the balance of trade, which includes both net exports and net income on foreign investments).

(Excerpt) Read more at theatlantic.com ...


TOPICS: Business/Economy; Culture/Society; Government; News/Current Events
KEYWORDS: bankruptcy; debt; greece
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1 posted on 03/08/2013 7:10:03 AM PST by SeekAndFind
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To: SeekAndFind

The media’s new motto: The gov’t still has money because it still has paper.


2 posted on 03/08/2013 7:13:27 AM PST by vbmoneyspender
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To: SeekAndFind

So why does he think we won’t turn into Greece? Because we borrow in our own currency and can print money to cover it. Great. That gives me a lot of comfort. The reality is we are Greece in the sense that we cannot stop spending. We have a Welfare State that we can’t pay for and don’t want to cut back. And if there is even a remote attempt to cut it back, people riot. In some ways, we are worse than Greece because we can borrow in our own currency. At least with Greece, there is the discipline of borrowing in another currency to stop the party.


3 posted on 03/08/2013 7:14:33 AM PST by Opinionated Blowhard ("When the people find they can vote themselves money, that will herald the end of the republic.")
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To: SeekAndFind
One has only to look at the US of the past, look at the US of the here-and-now, and extrapolate forward.

Tough times ahead.

4 posted on 03/08/2013 7:14:58 AM PST by The Duke (We don't rent pigs, but apparently we *do* ELECT them.)
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To: SeekAndFind
We will never turn to Greece because Greece keeps evolving, too. By the time we reach their current level, they will turn to Ecuador.
5 posted on 03/08/2013 7:15:04 AM PST by alecqss
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To: vbmoneyspender
No, the United States Will Never, Ever Turn Into Greece

Yeah - and this won't hurt.

You can trust me.

It's not about the money.

You don't have to be afraid.

I am not a crook.

I did not have sex with THAT woman...

I am not a dictator...

Someone's doth protesting too much...

6 posted on 03/08/2013 7:17:32 AM PST by GOPJ (DHS HAS secured: 1.6 BILLION bullets - 2.700 tanks and 35,000 drones ...to use on American soil...)
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To: SeekAndFind

People “on the inside” in DC know the crash is coming and some are serious “preppers”.

Any information or articles to the contrary are either whistling through the graveyard or just trying to keep the balls in the air just a little longer.


7 posted on 03/08/2013 7:17:41 AM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: vbmoneyspender
No, the United States Will Never, Ever Turn Into Greece

Yeah - and this won't hurt.

You can trust me.

It's not about the money.

You don't have to be afraid.

I am not a crook.

I did not have sex with THAT woman...

I am not a dictator...

United States Will Never, Ever Turn Into Greece...

Someone's doth protesting too much...

8 posted on 03/08/2013 7:18:13 AM PST by GOPJ (DHS HAS secured: 1.6 BILLION bullets - 2.700 tanks and 35,000 drones ...to use on American soil...)
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To: vbmoneyspender
The media’s new motto: The gov’t still has money because it still has paper.

Obama's stash.

9 posted on 03/08/2013 7:18:57 AM PST by Thane_Banquo ( Walker 2016)
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Comment #10 Removed by Moderator

To: SeekAndFind

” - - - predict that the United States is “turning into Greece.” - - - “

Duh, does that mean that The Former United States of America is NOT ‘To Big to Fail?’


11 posted on 03/08/2013 7:19:53 AM PST by Graewoulf ((Traitor John Roberts' Commune Obama"care" violates Anti-Trust Laws, AND the U.S. Constitution.))
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To: F15Eagle

We have passed the “Event Horizon”.


12 posted on 03/08/2013 7:22:42 AM PST by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: vbmoneyspender

When we do, we won’t be throwing yogurt. We’ll be throwing lead.


13 posted on 03/08/2013 7:22:48 AM PST by TurboZamboni (Looting the future to bribe the present)
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To: F15Eagle

The USA is in a position analogous to where Donald Trump was 25 years ago.

He was into his creditors so deep that if he actually did declare bankruptcy he’d have taken them all down with him. So they had every incentive to keep him afloat, which they have done.

The ChiComs, Saudis, and anyone else whom we might take down if we failed will continue to do likewise.


14 posted on 03/08/2013 7:24:17 AM PST by Buckeye McFrog
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To: SeekAndFind

Up until about 2 months ago, I believed that the Fed was printing $40B every month in new paper money.

They are not. Presses can’t work that fast.

They are simply adding that amount virtually, electronically, via computer, to the reserve amount. Printing non-existent, non-paper money with a click of the mouse.

We’re not Greece, though. Wink wink.


15 posted on 03/08/2013 7:25:33 AM PST by lurk
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To: SeekAndFind

This is the dumbest article ever written possible. Clearly any nation or empire can crumble or fall into deep economic problems.

One big difference, is I doubt Greece has the level of intensely violent inner city populations that will go ape sh*t when they don’t get their welfare checks.


16 posted on 03/08/2013 7:25:42 AM PST by MNDude (I survived the sequester!)
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To: vbmoneyspender

The media’s new motto: The gov’t still has money because it still has paper.


Paper is SOOOOO 20th century. Now they use bits. They have quite a few.


17 posted on 03/08/2013 7:27:46 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: Opinionated Blowhard

Economies are like cars. They crash all the time but for different reasons and with varying degrees of impact. NO, we’re not Greece. Big deal. It’s like saying that we’re in a sports car and Greece is an SUV so we’re not going to all die in a rollover accident.

No, we’re gonna all die in a high speed accident when we slide off the road and wrap the car around a tree.

Same result, though.


18 posted on 03/08/2013 7:30:04 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: The Duke

One has only to look at the US of the past, look at the US of the here-and-now, and extrapolate forward.
Tough times ahead.


I’m reminded of the near future in Looper, sans loopers and TK’s.


19 posted on 03/08/2013 7:30:50 AM PST by cuban leaf (Were doomed! Details at eleven.)
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To: GOPJ

These are not the droids you are looking for...


20 posted on 03/08/2013 7:31:38 AM PST by cuban leaf (Were doomed! Details at eleven.)
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