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

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

November 15th, 2011 in Opinion Free Press

Silvio Berlusconi

Silvio Berlusconi

Photo by Associated Press /Times Free Press.

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?