My Big Fat Greek Deficit

WashingtonTimes.com

The titanic 772-point drop in the Dow Jones Industrial Average Since Tuesday should serve as a wake-up call to Washington's big spenders. The domestic unease Greece Facing Economic sent shock waves around the globe Felt, and, unless we change current Our Ways, What Happened There Will Happen Here.

Athens Was the scene of a clash Between Police and Thousands of Demonstrators Who Were That angered exorbitant salaries for civil servants would be cut, overly Could Be Generous pensions Slash and nonproductive Employees Employers might be fired by Armed with newly flexible work Regulations. The violent response of apoplectic union Organizers These sensible austerity Measures to left three dead, 59 Injured and 25 arrested.

This tragedy shows That a country grown accustomed to lavish government benefits Does Not Give them up willingly. It is far too easy for Politicians to dole out the Benefits Without Consequences of Worrying about paying for them later. When country clubs falter in making good on Neglected These debt obligations, Increases Their Credit Risk, Corresponding with a jump in the Interest Rates Demanded by worried investors. Increase in rates with That, What Difficult loans are Already Suddenly it seems impossible to pay back.

To Overcome this Financial steep hurdle, the European Union and the International Monetary Fund Offering Greece are a sweetheart deal - below-market interest-rate loans of $ 141 billion in exchange for the aforemention cutbacks in the country's wild Spending habits.

While America's Network Reach ink has yet to Greek Levels, we are headed in Dangerous That direction. According To the World Bank, Greece's External Debt stands at $ 582 billion, an amount equal to about 170 Percent of Its gross domestic product (GDP). By contrast, the External Debt of the United States is $ 13.8 trillion. With Our larger economy, establishing Debt That 96.5 Percent of GDP - But Still Troubling a lower number.

University of Maryland economist Carmen M. Reinhart and Kenneth S. Harvard colleague Rogoff show in a study published Countries That Earlier this year with a gross public Debt Exceeding 90 Percent of GDP Percentage Gave up about a point of Growth Each Year When Compared to Countries with less Debt. It is hard to see less Debt in America's future, Given the Demands of public-sector unions for ever-increasing salaries and pension benefits and the state of Our Entitlement programs.

The Centers for Medicare and Medicaid Services Indicate That President Obama's health care program will cost much more Than Estimated just a couple of months ago. Itself Medicare faces unfunded Liabilities of $ 89.3 trillion. Combined with Social Security's Excessive Promises, this country faces a staggering $ 106.8 trillion in Promised Benefits, the bills for Which will soon begin to eat due. That puts us squarely in the Greek league Debt Within a decade, Without the benefit of Having a larger nation to Which We Can turn for a bailout.

The situation in Greece Confirmed Investors' Worst Fears, and the market is sending the statement That it does Not Like What It Sees.