Wednesday, May 12, 2010

Today Greece, tomorrow the US?

Over the weekend the European Union (EU), the IMF, the Fed and other parties put together a trillion dollar line of credit for EU members who are at risk of defaulting on their debt.  The stock market reacted favorably on Monday, reversing most of last week's losses.  Today NYT writer David Leonhardt draws comparisons between the Greek economic situation with that here in the US.  At an abstract, qualitative level the two situations are similar: both countries are living beyond their means and are borrowing from foreigners to make up the difference.  Fortunately for the US, the scale of the problem here is more manageable than in Greece.  Nonetheless we face unpleasant choices; we cannot have more government programs and spending (as preferred by Democrats) AND more tax cuts (as preferred by Republicans).  Who elected these politicians anyway?  Oh, we did. 

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