In Greek Crisis Nothing New, Christopher Cantrill expands on the point that is obvious to any honest observer with a brain: governments cannot continually overspend by vast amounts without eventually facing a serious day of reckoning. Greece is facing theirs right now… ours is coming!
Even the New York Times (gasp!?!) admits in an article this morning…
It’s easy to look at the protesters and the politicians in Greece — and at the other European countries with huge debts — and wonder why they don’t get it. They have been enjoying more generous government benefits than they can afford. No mass rally and no bailout fund will change that. Only benefit cuts or tax increases can.
Yet in the back of your mind comes a nagging question: how different, really, is the United States?
The numbers on our federal debt are becoming frighteningly familiar. The debt is projected to equal 140 percent of gross domestic product within two decades. Add in the budget troubles of state governments, and the true shortfall grows even larger. Greece’s debt, by comparison, equals about 115 percent of its G.D.P. today.
But that will never happen to us… right? The Annointed One can suspend the laws of economics with a wave of his hand… or better yet, a magnificent speech… can’t he?
Gold is starting to look like a better investment every day.