America’s economic future is on full display in Greece. Adding another massive government entitlement program is a great way to accelerate the timetable.
America thinks it could never fall. Could Greece collapse? Yes. But America—not a chance. This is the richest country in the world. And in spite of all the headlines, in spite of all the dire statistics blared by reporters, the American way of life still continues. Gas stations still have gas. Food still sits on grocery shelves. Even if through debt, most Americans are still enjoying life. So surely America can’t be in that much financial trouble. After all, politicians just voted in potentially the largest expansion of the welfare state in American history on Sunday. America must have money to burn.
But here is the reality. It wouldn’t take much for the vulture investor dinner party to turn its sights from Greece to America. That is the conclusion of a small but growing group of concerned analysts.
“The wolf could be at our door sooner than we think,” says Carmen Reinhart, economics professor at the University of Maryland and author of This Time Is Different. Confidence in the dollar “could turn quite abruptly,” she says.
All it would take is one failed treasury auction, warns Reinhart, and the dollar’s status as a perceived safe heaven would vanish—along with its status as the world’s reserve currency.
If that were to happen, media commentators wouldn’t be comparing California to Greece, they would be comparing the entire nation to something more akin to Zimbabwe or Soviet Russia.
Politicians are far too complacent about America’s economic condition. Instead of getting America’s financial house in order now—while some analysts think it still has a chance—politicians are doing the exact opposite. Rather than seeing the crisis in Greece and cutting expenses and leading the country to live within its means—it is as if politicians are doing their level best to make it happen here too.
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