Greece – A Preview To US National Debt Crisis?

Greece is in chaos as it faces up to a potential default on its national debt. Before you snicker, keep in mind this could be a preview to a U.S. national debt crisis.

Have you ever seen a country put under the whip? Well, you are seeing it now. Greece has no way out from under its debt. The load is just to high and equates over 12 percent of its entire economic output. It is supposed to be under 3 to be in the European Union! Faced with the crisis, the Greeks have turned hat in hand to Europe. What have they found?  Little help. The EU has agreed to back them but only after spending is slashed by huge amounts and taxes are raised. It is going to be a rough decade or longer in Greece.

The scary thing is this presents somewhat of a preview of what could happen in the United States. We currently owe over $12.3 trillion. The debt is conservatively forecasted to rise a trillion dollars a year for the remainder of the decade. The real figures will be much higher as Social Security and Medicare begin to be crushed by the retiring baby boomer generation. As the debts skyrocket, the market is going to realize at some point that the United States government can’t possibly pay its debts. What happens then?

Well, all hell is going to break loose. The first problem will be the dollar will plummet and be pushed to the side as the international currency. Inflation will go through the roof with hyper inflation being a real possibility. At some point, the US will simply default on its debt. When that happens, the world financial system will crash because the US Treasure notes are considered the single safest financial products in the world after gold. Put another way, every country owns them.

Is there any way out of the mess? Yes. A group of countries can form an alliance and basically prop up our government. With that help, however, will come huge demands. They will include radical spending cuts and massive tax increases. It will not be a good day to say the least.

What is the difference between the Greeks and the United States? The Greeks can rely on the EU for help. We, in contrast, are usually the country helping others, but not this time.

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