What I find funny listening to the media is how they like to paint the European debt crisis as some sort of foreign thing, like it is their problem. The media depicts the United States as a statue of stability.
However, as the saying goes, those who live in glass houses shouldn’t throw stones.
To act like these so called PIIGS (Portugal, Ireland, Italy, Greece, and Spain), or Club-Med European, countries are socialist basket cases and that the U.S. is some sort of capitalist haven is, in one word, a joke.
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The numbers don’t lie and here are the numbers.
Italy’s debt-to-GDP ratio is 118 percent. According to U.S. government spending.com, by 2012 total government debt at the state, local and federal government level will be 120 percent!
Italy’s current year’s fiscal deficit is 3.9 percent of GDP and its economy will grow about 1.4 percent this year.
The United States’ fiscal deficit is near 9 percent of GDP for 2011 and the economy will grow at around 2.5 percent this year.
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Italy has always been able to handle a larger debt load because nearly all of its debt is domestically owned. The United States, on the other hand, is dependent on foreign buyers, who own nearly 40 percent of its debt, and money-printing by the Federal Reserve, which has now surpassed China as the largest owner of the government’s debt due to its quantitative easing measures.
In Washington, we have juvenile bickering over the debt ceiling. Where despite all of his current political problems, Italian Premier Silvio Berlusconi quickly pushed through an austerity package to cut government spending.
The only difference is — and it is a big difference — the United States has the ability to print money to buy its own debt (and its dollar is the world’s reserve currency).
However, when you look at the facts, my question is simple: Who is really the fiscal and political basket case?
About the Author: David Skarica
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