published Sunday, June 26th, 2011

‘... the glory that was Greece’

American poet Edgar Allan Poe long ago penned the lines, “... the glory that was Greece/And the grandeur that was Rome.”

Today, Greece and Italy seem farther still from their greatest days of glory and grandeur. Both are suffering catastrophic economic troubles.

Why? They are deep in debt, and nobody wants to go through the painful reductions in government spending and other austerity measures necessary to turn things around.

Italy’s credit rating is in danger of falling, and the European Union is struggling to agree on some sort of new bailout for Greece, whose possible bankruptcy is threatening all Europe directly — and the rest of the world indirectly. Some other countries in Europe are in a similar bind.

But we in the United States needn’t look down our noses at Greece, Italy or the rest of Europe. That’s because we share all too many of their troubles. (See the editorial above.) Those nations may be further along the path to fiscal ruin than we are, but we are moving in the same direction if we will not get our federal spending under control and begin the hard task of reducing our disastrous national debt.

If we don’t want our own nation’s “glory” and “grandeur” to be spoken of in the past tense, we need to act now. As a less poetic saying goes, “The wolf is at the door.”

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nucanuck said...

The only solution for Greece, and probably many more countries to come, will be default followed bt austerity. Without the default their debt is unpayable. With the inevitable default Greece will leave the Euro and devalue by at least 50%. Greece will struggle for a year or two, but be far better off than than trying to pay back an impossible large debt.

The European Union knows default will happen, but wants to buy more time...hoping for a miracle.

The US will also default, but it may be through continued monetary debasement. Expanding the money supply acts as a back door tax on all Americans while devaluing the bonds held by other nations. Basicly it comes down to legal government counterfeiting. Because this has become obvious to bond holders, the market for US bonds is drying up...a buyer's strike. Normally, rates would rise until the bonds found a bid, but the Fed is buying up and holding the bonds to artificially hold rates low. That is a rigged market and destined to fail. Buyers beware.

It's too late to worry about losing our glory or grandeur...surviving the economic readjustment should be our aim.

June 26, 2011 at 1:46 a.m.
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