Greece Is Not The Only Country With A Debt Problem
$BX
This is a reminder that the US federal government owes creditors $18-T, the Key difference is the US Fed can print USD, and Greece has no currency of its own.
No one would put the 2 economies in the same basket, there are some troubling common issues
As for other differences the US economy is huge and diversified, and Americans hold more than 50% of US debt.
Despite the differences, the fiscal pressures confronting the United States come from sources similar to those afflicting Greece. Growing spending on public benefits threatens to overwhelm the US economy in the long term, as that has done to all democracies throughout history.
Social Security, Medicare, Medicaid and health programs a other social benefits consume more than 50% of the US budget, and spending on these programs is growing steeply. The nation’s lawmakers must reform unaffordable and outdated benefit programs.
Peter Peterson, the former US Commerce Secretary and co-founder of Blackstone Group (NYSE:BX) is concerned about the United States in light of Greece’s debt crisis.
He acknowledges there are important lessons to be learned about the benefits of long-term planning and maintaining fiscal health and flexibility. “Without question, the United States remains on a fiscal path that is unsustainable and dangerous by any international standard,” he wrote Monday in the national press.
He cites a recent Congressional Budget Office estimate that the federal government’s debt will exceed 100 percent of GDP by Y 2040 based on current policy. That would do major damage to the economy, the CBO warns.
“Interest costs alone will reach $5.5-T over the next decade, and are on a path to exceed all federal revenues,” Mr. Peterson says. “That is an absurd fiscal trajectory for any country to put itself on, especially a strong nation such as America.”
The CBO projects a budget deficit of $486-B, or 2.7% of GDP, for this year, little changed from $485-B last year. But it sees the number soaring to $696-B in Y 2020.
A savvy businessman like Donald Trump, if elected, could move to fix this problem I believe.
Stay tuned…
HeffX-LTN
Paul Ebeling
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