USA Is Not Much Better Than Greece
By gewcew23
@gewcew23 (8007)
United States
February 20, 2010 6:05pm CST
We have or at lest should have read that Greece is in deep trouble, and Spain is not to far from joining Greece. Problem is USA and Spain are in the same boat behind Greece. Greece is running a deficit of 12.7% of their annual GDP, Spain is running 11.4% of their annual GDP. Where does the USA stand, well by running a 1.6 trillion dollar deficit this year compared to a GDP of 14 trillion dollars this year that comes out to 11.4%, the same as Spain. Portugal and Italy join Greece and Spain to form the PIGS, four European countries with a lot of debt to GDP and at risk of defaulting. Should not the the USA join the PIGS and call the new group US and the PIGS?
1 person likes this
3 responses
@ra1787 (501)
• Italy
21 Feb 10
The real problem is that while most european countries have huge debt but most of that debt is owned by the citizens of those countries (i know for sure that this is the case for my country italy), the united states have a lot of government debt but also a lot of consumer debt, so the overall debt is quite concerning considering the fact that most of that debt is owned by overseas investors (mostly china, japan and arabian countries), and if those investors get upset the us currency could experience some real trouble.
1 person likes this
@spalladino (17891)
• United States
21 Feb 10
You have to remember that we have a global economy these days. It's in the best interest of the countries that puchase U.S. securities that the U.S. dollar remain stable, otherwise the investors lose in more ways than one. They lose money on their investments and the value of their country's currency is also impacted.
@ra1787 (501)
• Italy
21 Feb 10
I completely agree with you, but it is surely a risk factor worth considering for the us economy. Asians and arabs have all the interest in keeping a strong dollar, but if things for the economy get worse and trust in the dollar gets undermined it could really mean trouble. So having good public finance is even more important for united states than for other countries in my opinion.
The other consideration i made is that more than just the public debt it is better to consider the overall debt of a nation and how much that debt is kept inside the country and how much is owed to foreign investors that surely have less interest in the wellbeing of the country.
@ATrain (56)
• United States
21 Feb 10
Yes many developed countries' governments have a significant deficit. And I believe that we are worse off than Spain because their debt (not deficit) is only about 60% or so of our total GDP as of 2009, whereas ours is around 90% according to CIA world Fact book. (It will be about another 9 or 10% this year). If a country has a large debt built up from many years of deficits in a row, it is in big trouble. The reason Greece got in so much trouble was because they had trouble paying interest on their debt.
The U.S. spent about 5.5% of its budget in fiscal year 2009 on debt payments, according to the Concord Coalition. And my government has a very high credit rating, so our debt payments are lower than say, Greece.
Now, imagine a country that isn't running a huge deficit, like Japan, but has 200% debt compared to their GDP. Greece has around 110% or so debt.
If the USA is not careful, we will end up like Greece in this sense.
@niponbharali (51)
• India
21 Feb 10
that's nice.we are going good to take world power seat in future.India and china is going very good.Their GDP is increasing at a rate above 7 and 9 percent respectively.I am really very proud of it.
