Will history repeat itself in the US as is now happening in Greece?

I don’t think so.

I’m with @marinelife…don’t think so, but there has to be a radical change from the spending of the Bush years and now President Obama. You can only live on a credit card so long.

Things go in cycles…hopefully, we are going into a “pay as you go cycle!” Like yesterday..loll

Yes, of course. It’s only a matter of time and loss of confidence. Fiat (paper) money always fails, eventually.

Look at a $1 (USD) bill. Compare it to a $100 bill. The only difference is that we believe in the relative scarcity of the larger-denomination bill and that we have some confidence in the value of the $1 to begin with. Neither of those has any real value other than the confidence of the holders and their collective agreement that they have certain value.

I’m amazed that this fraud has lasted as long as it has, frankly.

Let’s hope not.

It’s all based on confidence, rattle it enough and it’ll collapse. I don’t think it will come for the US any time soon though not without significant external forces. The people want to believe and the world wants a strong, consistent, consumer.

Americans will never care enough to start rioting in the streets. And if we did, the feds would just round us all up and/or kill us anyway.

@tinyfaery I laughed at that because its true, a little worryingly so :S but I feel like were in the middle of an overhaul, world powers are shifting, a realisation is setting in as far as resources, consumerism and markets go, we have to shift to future products and become markets leaders in those asap if were to hold onto pole position here…

I think its gonna take 10yrs or so to return to the glory days but we will come out shining if we don’t let hindrance get in our way. The world is making necessary and un-popular choices and the fact is you won’t be able to drive your 4×4 for much longer nor run the air-con all day and night…we’ve been living un-reasonably for too long and this sucks for all of us but ultimately we have too many great minds to stop us from achieving the goals.

The US and the EU has to take the lead on this one!

We don’t have to go down the same road Greece is now on, but if we remain so politically polarized and mired in right versus left balme games instead of taking bold evasive action that is just where we will end up.

Our current debt is approaching 100% of our Gross Domestic Product. But we have previously recovered from worse. Our debt was 120% of GDP after the cost or recovering from the Great Depression and winning WWII. The greatest generation rolled up their sleeves and paid that debt down with taxes up to 90% on very high income levels. But now we have taxes at 35% for the wealthiest earners and the public wants taxes cut even further. Just like Greece, you can’t have something for nothing. There is no Santa Claus whether you want him to bring you more social programs at no cost or more tax cuts that magically pay for themselves.

Simply put, no.

There are some important and significant differences between the situation in Greece and the one here in the United States. First and foremost, their fiscal situation is much worse than ours. Not only is Greece’s current deficit over 13% of GDP (ours is about 10% this year), but they have been running big deficits for all of the past decade. In 2007, before the global economic crisis began, Greece’s deficit was above 6% of GDP. In normal economic times, that kind of deficit is really bad (ours was about 1% of GDP in 2007).

Second, Greece already had too much debt before the economic downturn began. In 2007, Greece’s debt was almost 70% of GDP. Ours was half that. It is not surprising, nor a bad thing, to incur some debt during a big economic shock, but Greece’s foundation was already shaky before the shock even happened.

Third, the Greek government spends far more than we do. Total government expenditures in Greece are close to 50% of GDP. Even this year, with all the temporary spending, the US federal government spends about 25% of GDP. If you add in all the local and state government spending, we’re still about ten percentage points below Greece.

Fourth, our debt is held in our own currency. This gives us the option of devaluing our debt if we need to do so at some point. Greece doesn’t have this option, because it does not have control over its currency (the Euro).

Fifth, the US has never (not once) defaulted on its debt. This makes investors much much more willing to lend us money and gives us much more leeway than Greece, which has a slightly less stellar record.

Finally, the US has a much larger ability to deal with our fiscal problems than Greece does. For one thing, we are an extremely low-tax country (only Mexico, Turkey and S. Korea have lower taxes as a share of GDP among developed countries) and economically we could easily raise taxes to close our budget gap to much more sustainable levels (whether this is possible politically is another matter). For another, the US boasts the largest economy in the world, by a factor of 3. We generate more than 14 trillion in economic activity each year. We have the resources to deal with our debt. We just need to find the political will.

No, I don’t think the casualties in Greece have anything to do with what may or may not happen in other countries. (I am currently in Greece btw)

The Greek financial crisis follows similar ones all over the world, starting with the US itself. It was predicted, and it just took a little longer to happen because typically Greeks make their money from tourism, ie they are always affected by other countries’ situation the following summer.

In terms of numbers, Greece fares no worse than other countries within the EU, and the current crisis is certainly not as bad as those faced by Argentina and Turkey a few years back.

What is very different is the way Greeks themselves deal with such problems.

1. You are spot on when you mention the “mismanagement”. Most Greek governments (starting with the current PM’s father back in the ‘80s) have been not only embezzling state funds, but also mismanaging resources, and, after Greece joined the Eurozone, lying to the rest of the EU about the state of the economy.

2. This “under the carpet” logic has permeated the society: Greeks are out in the street drinking coffee (for 3 or more euros a piece) while the country is going to the dogs. Every Greek has a brand new car, the average family has 3 TV sets, a Filippino to do the laundry and an Albanian handyman. The average Greek man supports 3 Russian mistresses and several illegitimate children, officially has two jobs, unofficially 3, but only works around 20h a week, goes to the bouzoukia every Saturday night where he’ll spend at least 200 euros, and gives his kids more pocket money per week than an American child will see in a month. And this is the real problem. Greeks, on all levels, keep spending as if they’ve won the lottery, and when the money runs out, they just go and get a loan, or simply get themselves another credit card. And it’s accepted in the society that “this is what everybody does”.

3. Tax evasion is the norm, to the extend where there are laws that accept it as a fact. If all Greeks paid their taxes (I believe the evasion it’s something like 18BE/year or something), the problem would be solved overnight.

4. Now as far as the riots are concerned: everyone could see it coming, and it was only a matter of time. This is a country where people have a fistfight over who had right of way, and where a football referee was hospitalised in 2003 for giving a penalty that was actually uncontested, but the logic was that “he shouldn’t have given it so late in the game, even if it was a penalty”. This is a country where I was told by judges that, in order to solve my legal problem, the prudent thing to do would be to hire hitmen, and where the Supreme Court can be easily bribed to cover up a crime. A country where policemen, even when they are not corrupt (and they’ve come a long way) are too scared to intervene, and where riots and fires are now a “tradition”. When a syndicate or any group of people want something, the normal thing to do is go on strike, demontrate in the street, and burn a few cars (hence the rise in car sales despite the crisis). A country where even pensioners and the Single Mothers’ Union got into violent clashes with the police, and where there is a union strike even for a journalist that got fired from a private radio station (something unthinkable in any capitalist economy). And where lawyers went on a 2-year-strike, and even policemen strike!

No wonder then that, sooner or later, and with goverments (not this current one, but all the ones before) not simply mishandling, but outright stealing money, raising taxes that nobody pays, lowering salaries, firing people who are opposed to the governing party and hiring those who support them instead, and general corruption in every level of society, we reached this point. It will only get worse. Especially when racism trully kicks in.

Wow. Thanks, @Jack79, for giving us the perspective of someone who’s there!

Also, I wonder what the lawyers were demanding when they went on strike, and if they threatened to return to work if their demands weren’t met! :-)

In Greece people tend to think it is their human right to avoid paying tax, there is a huge underground economy in Greece and a vast incompetent government but so long as nobody came demanding tax money the citizens put up with the government. You reap what you sow.

Are we ripe for failing as a society? Yes. Will it look the same as in Greece? No. These are two entirely different setups. For those of you who think we will recover, I’m happy for you that you’re able to pull some hope out of your hat. As some previous posters have said, our paper money and certificates representing such, are solely based on consumer cofidence…just like the stock market.

Wait until all the retirement funds are totally wiped out by all kinds of mismanagement. Right now they are on life-support by maneuvers that resemble the ever-so-present ponzi scheme. Go down the line…teachers are really going to suffer. Firemen, and on and on. Their funds have been raped and pillaged. Municipalities, large and small, are all but a heartbeat away from financial disparity. I don’t wish to sound like a doom and gloomer, but, the writing is not only on the wall…it’s dangling in mid air.

It could happen here. There are already thousands of people who have stopped paying their taxes, and the government seems helpless to do anything about it except in a very few number of cases.

It will be far worse. There isn’t enough money in existence to bail out the US. It’s all based on faith and power; both are declining rapidly. The powers that be a busy peddling their bonds to China and the oil states, hoping that the eventual crash will hurt them more than US citizens. The US national debt can never be paid off, other than by hyperinflation (the banana republic method).

I would like to have more information of what others owe us. Surely if all our loans to other countries were called in, we would benefit.

Thanks to all, especially to @Michael and @Jack79 , whose responses were, I thought, excellent.

The general consensus seems to be that it’s unlikely the US will go the same route as Greece, but that we have lots of belt-tightening if we don’t want to become a peculiarly American version of a Greek Tragedy.

Or maybe you could sell Manhattan back to the Native Americans for a good profit?

LMAO! Would have to be a HUGE profit to help any with this mountain of debt our political leaders have accumulated for our grandchildren!

I’m doubtful about riots and such here. I saw the way the issue in Greece crashed the stock market for about 90 seconds today. That was interesting. Just a reminder that we are a global economy. We’re all in this thing together.

@stranger_in_a_strange_land You could be right, but it certainly doesn’t have to be that way. We were in debt deeper than Greece is right after WWII and we paid it down then. We are nowhere near that deep in debt now, when you look at debt as a percent of GDP. (That is the only rational way to look at it, as it removes any inflationary factors). What we lack today in this climate of Gubment Hate Fests, right-wing militias and political divisiveness, is the iron will the greatest generation had to roll up their sleeves and pay the debt down. We can either face the debt crisis and develop the national will to confront it, or keep denying it’s there till it steamrolls over us and out children.

In Greece, the problems are not solely on the shoulders of the government. Granted, they need to do a better job of ENFORCING laws rather than taking bribes and letting people break them all the time; however, the Greek people themselves share a lot of the blame, though many refuse to acknowledge this. Most every Greek lives WAY beyond their means, and an absolutely shocking amount either don’t pay their taxes in full, or not at all. And when the banks/credit card companies/tax people come calling for their money, they moan and complain about paying. Here is something really simple: If you can’t afford to go on vacations to islands every couple months, don’t go. If you can’t afford two nannies AND a housekeeper, don’t hire them! If you can’t afford designer handbags and shoes, DON’T BUY THEM. After having just come back from living in Greece for several years, I can honestly say I am not at all surprised to see the country in the state that it’s in. I just wish people would man up and take responsibility for the mistakes, rather than trying to blame someone else, i.e., the IMF for being “mean” to them for threatening to bring down the whole European Union.

@py_sue I find it pretty amusing that the riots are being talked about so much now. They are NOT a new occurrence by any means. As someone who lived in the area of Athens that was the hotbed of tear gassing/flashbombs/riots/protests on pretty much a weekly basis for the entire time I lived there, this stuff is old news.

@RareDenver Every word you speak is truth. :)

@primigravida We the people of the USA are ultimately to blame for our debt problem as well. We have one group who keeps voting to get more from the government while insisting the new programs won’t have any cost, and another group who keeps voting to pay less to the government while insisting that won’t increase the debt.

We had been paying the debt down slowly since WWII with taxes between 70 and 90% on very high incomes. Ronald Reagan cut the tax rate from 70% to 28% and our National Debt immediately began to skyrocket. He is the only US President in history to triple the national debt in 8 years. Bush 41 continued his policies and would have doubled the massive debt he inherited from his former boss had he won a second term.

Clinton kicked the top tax rate back up to 39.6%. He turned the debt curve back around and began paying it down again. And the tax increase did not kill business or stop the wealthy from getting richer and new millionaires from being born. He left office with the largest budget surplus in US history.

Bush 43 promised during the campaign to preserve that surplus, but cut taxes for the rich, blew through the surplus, and managed to double the debt his dad had run up. So it’s pretty clear what we need to do to pay things back down. Do what has already been proven to actually work. And it would work for the Greek economy too if they could develop the national will to actually do it.

It is all visible in this graph.

@ETpro er… I never really said anything about our economy, or made a comparison to the Greek one. Believe me, it would take a LOT of very, very bad things to happen and a complete mentality change of the entire culture to get to the point it is in Greece. I’m sure you are right and if the Greeks WOULD just have the will and motivation to WORK their way out of their debt, eventually, it would improve. But, I’ve seen too many workers there who just don’t give a damn about doing their job, let alone a “good” job. Maybe it’s because I’m from the Midwest, but we are very work-driven. We are proud of our jobs and cherish them. You work for a living, it’s what you do. You don’t screw around and live with your parents until your nearly 40 and piss away your money on booze and cigarettes. (and coffee) But alas, all in all, I am not worried we will ever become like the Greek economy. It would take something absolutely catastrophic for that to happen, like a bomb destroying the majority of the country. And even then, I have faith in people here, and their kindness and willingness to help a stranger in need.

@brazospete You are using buzzwords without backing them up. Please supply references for sounds like NAFTA and sounds like Revelations Ten Horns . I have read the Revelations that you refer to, and I don’t see the connection.

@brazospete I don’t see any relevance to the question.

[mod says:] Please stop posting repeated responses, and ensure that they are on-topic.

@primigravida I cannot speak to how the Greek electorate views things, or what political will they can muster to right their course. You are much closer to that, and are probably right. But the US was once facing a National Debt that was 120% of our Gross Domestic Product, and we recovered from it. Greece has hit 115% of GDP. Right now, the US National Debt is at about 91% of GDP. So just on the metrics, things aren’t all that different.

@ETpro Good point, and yet, we’re not being uncivilized and burning our country to the ground and we still manage to function each day without striking and getting an unpaid day from work.

@Dr_Dredd the lawyers were demanding not to have to pay a 21% VAT on their receipts (as opposed to 18% that it was before). They obviously worded it in the usual legalese, but that was the main point.

The joke of course is that lawyers never give you receipts anyway.

For a 10-minute job that another lawyer had already prepared, my former lawyer had to just sit next to me and do nothing, and supposedly get 470 euros (some of which was taxes and other expenses). His actual fee was supposedly around 50–80 euros. He demanded another 1200 “under the table”. And this was, according to him, “a friendly price”.

So I paid more than $2000 to have a guy sit next to me and do nothing at all, out of which the government got less than the corresponding taxes for a quarter of that. Officially, he declared no more than $100 that day and paid $18 in taxes. You do the math.

Lawyers are a dime a dozen. One of them tells me he wants something “under the table,” he can kiss my royal Swedish ass! : D

@primigravida We do have our Tea Party protesters out complaining that the deficit is way too high, so cut our taxes some more. But that’s a far cry from a national strike and fire bombings. And I cannot fathom how they public in Greece conceives that going on strike and burning banks to the ground is going to resolve the problem of being deeply in debt. It will only compound it, as listening to the Tea Party protesters would compound our debt problem.

@ETpro You’re absolutely right. It’s not only the fact that they are protesting and burning the city to the ground, but the fact that tourism agencies are destroyed, transportation stops, planes stop ferries stop…. it’s going to kill the tourism industry, and frankly, that is the only thing Greece has going for it. If they are going to drive away the only people who are actually able to spend any money there, well, it doesn’t take a genius to realize what that will do to the economy.

@ETpro

No, what compounds OUR problems is electing to office people who fight unnecessary wars and spend trillions to do so, then turning right around and electing to office people who spend trillions more on bailing out companies which should be allowed to fail.

@CaptainHarley I am no fan of high taxes. I doubt any rational person is. I have never seen a street protest begging for endless tax increases. But in fairness to this administration, in 1929 the Republicans were in charge of government, and tried out their “do nothing” strategy of letting the free market fix itself after they ran it into the ditch. The result was unemployment spiked from 2% to 25%, the banks collapsed and the entire nation lost their life savings, the Gross Domestic Product fell 40% and the misery spread all around the world, ending in igniting a World War which killed 60 million people. And in the end, we had to throw money at the WPA and at winning WWII to cure the idiocy of letting the economy drive itself. It works no better for entire economies than it does for cars.

So when decades of Republican deregulation and drive without hands management brought us to the brink of this crash, I think it made sense to fix it sooner rather than later. Personally, if it is pay me now or pay me later, I will take now as opposed to another Great Depression and perhaps WWIII which would likely be an all-out nuclear war.

@ETpro

You’re assuming too much of a governmental role in economic recovery. Actually, it’s the people, acting in concert, who decide when recovery is underway. So we’ re going all the way back to Herbert Hoover’s time for comparisons? Any historian will tell you that the Great Depression was due to a lack of confidence on the part of the American people, coupled with a political philiosophy of the times ( both Republican and Democratic ) which did not believe the Constitution permitted government intervention in economic matters. As a matter of fact, the Supreme Court threw out a large number of the programs instituted by President Roosevelt for that very reason.

That period of history isn’t valid as a comparison to the current economic situation.

@CaptainHarley The statistics are abundantly clear that doing nothing in 1929 worked terribly and governmental intervention helped starting in 1933. In fact, Republicans became so outraged at recovery efforts that in 1937, FDR cut back and what followed was the recession within the Depression, with unemployment spiking from 10% back up to 15%. The President put the pedal back to the metal and by 1941, before Pearl Harbor, the GDP was back where it should have grown to had there been no Depression. Right wing ideologues have invested enormous effort in historical revision to support their pet theories of free-market perfection, but the data speak loud and clear. See this.

When consumers cannot spend, and business cannot spend, if government goes on an austerity program as Hoover’s Administration did, the result is a long-term dwindling spiral. We in the USA need to pare back the National Debt as soon as the economy is back on track, because it is possible to get in such a bad debt position that government cannot spend out of the inflation curve such an attempt will create. Argentina did so, and it took a decade for them to recover. Greece may be on the road to the same fate.

It took World War II to pull America ( and the rest of the world ) out of the Great Depression. Almost all of FDRs attempts amounted to little more than stop-gap measures.

@CaptainHarley That is just more Republican historical revisionism. Look at the graphs of GDP on the link I posted. It had fully recovered by the Summer of 1941. Pearl Harbor was bombed on December 7, 1941; bringing the USA into WWII.

Besides, the regressive mantra is Government spending cannot ever solve recessions or depressions. So what was WWII then? Did the private sector fight it. Was it a mercenary army that the US sent to war? It was MASSIVE government spending. Claiming government spending can’t solve recession but WWII did is logically inconsistent. It requires that y9ou willingly accept concepts which are total contradictions of one another.

The thing that distinguished a true ideologue from someone who just hasn’t considered all the facts of a matter is that an ideologue is so convinced of the rightness of their belief system that they will rewrite history and deny any clear facts that conflict with their beliefs.

I heard one debate ebtween a logician and a believer in moral relativism. The logician pointed out that if truth is relative to prevailing beliefs, then in AD 900 the Sun would have orbited the Earth. The moral relativist was totally unmoved by this argument. He calmly stated that, Yes, indeed the Sun did orbit the earth in AD 900! That coming from a man with a PHD in philosophy. Ideology is a powerful thing that corrupts logical thought.

America was tooling up for WWII long before Pearl Harbor. It wasn’t the government spending on the war which resulted in an economic turn-around, it was the common effort required on the part of the populace and the resulting change in confidence. Keep in mind that the income tax was declared unconstitutional when first proposed, but people accepted it because of the war.

Things are seldome as simple and straghtforward as we might first suppose.

And BTW… from where I sit it is the left which is addicited to historial revisionism. I have a personal example. There is a far left college professor who claims that no American soldiers were spit upon when they returned from Vietnam. I know this to be an outright lie, since it happened not only to a number of my brothers, but to me as well.

@CaptainHarley Right. I forgot completelyn that statistics, facts and such are always wrong. Whatever you want actually fixed the great depression. So there is no sense debating it. Just believe…

As to the professor, all ideologues are alike in that they only see things through the lens of their choosing.

@CaptainHarley I had to go look it up. There is no way that prewar defense spending accounted for the recovery. http://restoringsanity.org/military/military_spending.html

@ETpro Good answer

@YARNLADY Thanks. At least one person is listening. :-)

Very unlikely.

History always repeats itself. We seem to forget that even the War on Terrorism isn’t new. If you look at the history of the US of the last century, from around 1900 until (and during) the First World War there were plenty of bombings in the US blamed on “Bolsheviks”, “radicals” and “unionists” (more or less equally blamed). Even “illegal immigrants” were a problem, but it wasn’t so much illegals from Mexico and Central America, but legally immigrated Resident Aliens from Europe who were (rightly) protesting their second-class status… and sometimes those protests got out of hand, as protests will. So if you were a Greek or Italian or other southern or eastern European rounded up in a police counter-reaction (or provocation) to a riot, then you were by that very fact an “illegal immigrant”, and subject to deportation.

The current Greek riots may not be exported to the US this month or this year… hopefully not even this decade. But when our currency fails because of “one bailout too many”, then it’ll happen. And with our current policies, currency failure is a matter of “when”, not “if”.

@CyanoticWasp Last time riots hit here it was because of one bailout too few back in 1929. Part of the reason history keeps repeating itself is that there are too many ideologues unwilling to learn the lesson it taught last time. There are no dropouts permitted in the school of hard knocks.

@ETpro

[ Shrug ] Believe what you like, you’re obviously not going to be swayed by argumentation or debate. I never said that the pre-war spending was “responsible” for the recovery, all I indicated was that it began the recovery. What you exemplify is the very thing you rail against: the ideologue unmoved by facts or reason.

@CaptainHarley I know the claim is very commonly made that WWII ended the depression. I had previously studied it to see if that is true. Because my previous study showed it is not, I took up this debate frankly hoping you might show me where I might be wrong.

I am quite open to argument, debate and refutation. You have showed nothing to refute the numbers and reports of actual history I provided. Quite the opposite, you put forward a claim that WWII ended the depression. I refuted that with historical reports regarding the GDP’s recovery.

You then moved to a claim that the numbers were skewed because the defense spending for WWII started years before the war. I looked that up, because I was ready to admit that if you were right, that casts my statements in doubt. But you were not right. Major defense spending did not start till Pearl Harbor was attacked. And ultimately, defense spending is government spending. It just buys things that immediately get destroyed instead of things like highways and commercial airports that add to the economy for decades.

But despite all the facts refuting your belief, you still claim to be right because you are an ideologue and your beliefs trump any facts. Unlike me, you are the person unwilling to concede a point when the facts go against you. I can show you any number of instances where I believed something to be true about past history, but when shown differing facts, changed my belief. My interest is not in supporting an ideology but in getting at the truth.

Finally, even if it were true that defense spending ended the depression, one could not logically conclude from that that government spending can’t help mitigate economic downturns. The conclusion would have to be just the opposite. You would have to conclude that government spending needs to be massive to end a downturn.

Have a nice day, but don’t think you can use weasel words to win it.