Why the United States Is Not Greece
Even for those who understand that cutting deficits right now will only weaken a still-fragile recovery, and that weakening the recovery will only increase deficits, getting past the argument that “a eurozone crisis is on its way” is no easy task. Here is a self-defense lesson.
by John Miller and Katherine Sciacchitano
For almost two years, we’ve been hearing a new battle cry in the war against government spending: unless the United States slashes deficits we will become Greece, Europe’s poster child for fiscal insolvency and economic crisis. The debt crisis in the eurozone, the 17 European countries that share the euro as their common currency, is held up as proof positive of the perils that await the United States if it continues its supposedly fiscally irresponsible ways.
Take the Heritage Foundation, the Washington-based think tank that specializes in providing red meat for anti-government pro-market arguments. Heritage introduces its 2011 chart on the rising level of government debt (to GDP) with this dire warning: “Countries like Greece and Portugal have suffered or are anticipating financial crises as a result of mounting debt. If the U.S. continues federal deficit spending on its current trajectory, it will face similar economic woes.” Read more.