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The financial crisis in Greece should be a wakeup call for Americans, as there are some disturbing parallels between that European country and the US.
If you haven’t heard, banks in Greece – closed off and on for several weeks now – are closed again until Thursday. And ATMs are still out of cash.
Debt and other economic problems could destroy American independence just as they undermined Greece’s status as a nation.
Those who don’t believe America could share Greece’s fate need to take a look at some disturbing trends in the US economy. America, sadly, is repeating some of the same mistakes that destroyed Greece’s.
1. America is accumulating more debt than it possibly could pay off, just like Greece. The amount of debt accumulated by the Greek government exceeds Greece’s gross domestic product (GDP) by 177.1 percent, The Hill contributor Dan Perkins noted. The GDP is the value of all the goods and services produced by Greece’s economy. That means you could seize 100 percent of the proceeds of every business transaction in Greece for an entire year — and you would still not have enough money to pay off the nation’s debt.
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The amount of debt held by the United States government is now 74 percent of the nation’s GDP, the Congressional Budget Office reported. If present spending and taxation levels continue, it will reach 101 percent of the US GDP by 2039. The US national debt currently is 18 trillion.
“What research does show is that when countries’ debt levels reach 85 percent of their economy and higher, you see a strong correlation with lower economic growth,” Romina Boccia, a research fellow at the Heritage Foundation, told The Daily Caller.
2. America spends most of its money on entitlements, just like Greece. The Greek government spends around 56 percent of its budget on entitlements and interest payments on debt, Perkins said. The US government actually spends more — around 66 percent of its budget on entitlements and interest payments, according to The Heritage Foundation.
3. Too many citizens in America are dependent on the government for benefits, just like in Greece. Around 109 million Americans in 2013 were receiving government benefits such as Social Security or food stamps, according to the US Census Bureau.
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To make matters, there were only 103 million full-time workers. That means more Americans are actually collecting benefits than are actually working.
4. America is experiencing economic stagnation, just like Greece. In 2013, the average income in 81 percent of the counties in the United States was lower than it was in 1999, The Washington Post reported last year. For example, when adjusted for inflation, the average income in Harris County, Texas (Houston) was around $13,000 lower in 2013 than in 1979, The Post estimated. This means Americans simply do not have the money to pay off all of the debts being accumulated in their name.
Additionally, the amount of debt owed by the average American household is 370 percent greater than the average household income, Forbes writer S. Kumar noted. The average household income in the United States is $55,192 a year, yet the average American family owed $204,992 in debts, such as mortgages and student loans. The average American family now pays $2,355 a year in credit card interest, Kumar estimated.
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