published Tuesday, November 15th, 2011

Greece, Italy ... the U.S.?

One of the most alarming aspects of the debt crisis in Italy -- a crisis that has brought down Prime Minister Silvio Berlusconi -- is how it parallels the United States' own debt woes.

Italy's debt, $2.6 trillion, has risen to 120 percent of its gross domestic product -- or everything that Italy's economy produces in a year.

The United States' debt, $14.9 trillion, is around 100 percent of our GDP, so we are not far behind Italy in that frightening regard.

Also like the United States, Italy is in a time of anemic economic growth, if not outright recession. And it has had a free-spending mentality on social welfare benefits -- regardless of whether it could afford them.

So now, Italy is bringing in a new leader after Berlusconi resigned. The leader, Mario Monti, is an economics professor. He promises to get a panel of "experts" working on Italy's financial problems before Italy goes into default on its huge debt and causes grave economic harm to all Europe, and thus to the United States.

Unlike Greece, which has been bailed out by Europe, Italy's debt and economy are too large for Europe to rescue -- even if that were a wise course of action. So it is planning strict austerity measures -- measures that would not have had to be so painful if common sense and fiscal discipline had been imposed years earlier.

With the troubling parallels between the United States' financial woes and those of Italy, Greece and some other European countries, one even more disturbing fact lingers: Our president and too many members of Congress seem to believe we can avoid the potentially catastrophic consequences Europe is facing despite our having behaved in the big-spending ways that brought Europe to that point.

Do you agree with them?

4
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nucanuck said...

Interesting that the countries of northern Europe, the ones with the highest taxes and happiest citizenry, don't seem to be having the same economic difficulties as the US, England, and the southern tier of Europe.

It would seem that the problem is not how much you spend so much as not taxing for what you spend. Cutting taxes may stimulate the economy, but it has failed to produce enough revenue to pay our bills. Thirty years of Reaganomics has scuttled the ship, it's off to Davy Jones' locker we go.

The good news is that our international military follies will soon be over. The military-industrial complex will die from lack of funding. The US will be a whole different country by 2021.

November 15, 2011 at 12:53 a.m.
conservative said...

Obamination is a Socialist, all the Demoncrats are Socialists and some Republicans are Socialists. Spending is their first priority. They were elected to spend by greedy immoral people who want someone else's property. No risk of imprisonment when you hire a politician to steal for you.

November 15, 2011 at 8:26 a.m.
Livn4life said...

There it is, the first poster here. He's got it all figured out. What we need to do is emulate Northern Europe and tax tax tax and the war on economic downslide is won. I would laugh but a tone of seriousness in that poster, makes me pause and reflect. We still have to blame Reagan. Gad, when will all who do that finally end up in old DJ's locker?

November 15, 2011 at 10:41 a.m.
nucanuck said...

L4l,

Our Congress spends the money and, even if we don't like it, it's our responsibility to pay the bill. Sure, Congress spends to much, but to turn away from paying our bills ends in default. Is that what you advocate?

November 15, 2011 at 10:07 p.m.
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