Why the United States Is Not Greece or Italy -- and Shouldn't Act Like It

Flaylo

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Feb 10, 2010
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Robert Creamer: Why the United States Is Not Greece or Italy -- and Shouldn't Act Like It


In the run-up to the Super Committee deadline, the news is filled with headlines about the potential default of Greece and Italy on their government debts.

Some might think that these developments highlight the need for draconian austerity measures in the U.S. to prevent us from suffering a similar fate. The Republican Party claims that "our debt has put us on the same path as Greece." They would be wrong.

To see just how wrong, all you need do is look at the difference in what the U.S. government is paying to borrow money today -- and the rates being charged to Greece and Italy. Last week the financial markets demanded 7% interest rates on 10-year Italian bonds. That ultimately forced the passage of unpopular austerity measures, and the resignation of Prime Minister Berlusconi. Similarly onerous interest rates forced out Greek Prime Minister Papandreou several weeks ago.

Meanwhile, the yield on 10-year bonds has been at near-record lows - around 2% throughout the summer. And 30-year U.S. Treasury bonds yields have hovered around 3%.

What explains the difference?

Is it the "excessive" social benefits offered by Greece and Italy?


As economist Paul Krugman points out, there is no relation whatsoever between the level of social benefits and the interest rates demanded by financial markets.

Of course all European countries offer substantially more generous social benefits to their citizens than does the United States -- including universal health care. But Italy and Greece do not have bigger welfare states than other countries that are doing quite well financially. Before the crisis, social expenditure spending was lower in Greece and Italy than it was in Germany -- and a good deal lower than in Sweden where GDP has been growing throughout the crisis.

Meanwhile, Canada, which has universal health care and much more robust social safety net programs than the United States, did a much better job weathering the financial crisis of 2008 and the years since than did the United States.



No, other factors are at work here.


So much for the myth put out by dumb Repugs that socialism caused the financial problems of Greece and Italy.
 
Robert Creamer: Why the United States Is Not Greece or Italy -- and Shouldn't Act Like It


In the run-up to the Super Committee deadline, the news is filled with headlines about the potential default of Greece and Italy on their government debts.

Some might think that these developments highlight the need for draconian austerity measures in the U.S. to prevent us from suffering a similar fate. The Republican Party claims that "our debt has put us on the same path as Greece." They would be wrong.

To see just how wrong, all you need do is look at the difference in what the U.S. government is paying to borrow money today -- and the rates being charged to Greece and Italy. Last week the financial markets demanded 7% interest rates on 10-year Italian bonds. That ultimately forced the passage of unpopular austerity measures, and the resignation of Prime Minister Berlusconi. Similarly onerous interest rates forced out Greek Prime Minister Papandreou several weeks ago.

Meanwhile, the yield on 10-year bonds has been at near-record lows - around 2% throughout the summer. And 30-year U.S. Treasury bonds yields have hovered around 3%.

What explains the difference?

Is it the "excessive" social benefits offered by Greece and Italy?


As economist Paul Krugman points out, there is no relation whatsoever between the level of social benefits and the interest rates demanded by financial markets.

Of course all European countries offer substantially more generous social benefits to their citizens than does the United States -- including universal health care. But Italy and Greece do not have bigger welfare states than other countries that are doing quite well financially. Before the crisis, social expenditure spending was lower in Greece and Italy than it was in Germany -- and a good deal lower than in Sweden where GDP has been growing throughout the crisis.

Meanwhile, Canada, which has universal health care and much more robust social safety net programs than the United States, did a much better job weathering the financial crisis of 2008 and the years since than did the United States.



No, other factors are at work here.


So much for the myth put out by dumb Repugs that socialism caused the financial problems of Greece and Italy.



gay..............

Does this meathead not win the award on this forum for posting up links from uber-left websites like The Huffington Post?

kool_aid_man_glass-2.jpg
 
Background on the Greek economy and its health care system...
:eusa_shifty:
Euro crisis: Why Greece is the sick man of Europe
19 December 2011 - It is Greece's most marginalised who are being hardest hit by the slowdown
Marina Derdevian was never well off but her fortunes and health have declined as Greece's economic woes have worsened. For decades, she managed to eke out a living, grinding coffee beans and selling sticky, syrupy confectionary on the sun-kissed island of Samos until everything changed in 2009. Local banks foreclosed her business because of unpaid loans. Her life savings - 30,000 euros ($39,000; £25,000) - went to lawyers. Her debts deepened. And the stress triggered a stroke, leaving her hemiplegic, and in a wheelchair for life. A year later, the shopkeeper was diagnosed with ovarian cancer, and now state doctors have halted her cancer treatment because of unpaid social security and medical contributions.

They also shut the door on her stroke rehabilitation therapy and refused to refill her prescriptions. Eventually, social services stepped in. But, rather than accommodate Marina Derdevian's desire to stay home in Samos, they packed her a bag, shipped her to Athens and put her in a retirement home for Greece's dwindling Armenian community. "I never imagined ending up like this," she whispers. "But do I deserve to die? Do I deserve to go because my country is in [financial] ruins and the national healthcare system has failed to serve people like me?"

Understaffed and under-supplied

These are questions that Europeans are no longer used to hearing about - but in Greece the financial crisis has put the right to state health protection in peril. Brutal budget cuts have slashed hospital budgets by up to 40%, spraining an already understaffed, under-supplied and, in places, corrupt health system. More importantly, growing economic inequality has more and more low-income and middle class people losing state health care access. "If a country's financial fortunes are looking well, then health is a top priority," says Nikitas Kanakis, a paediatrician and director of Medecins du Monde in Greece. "But when you're squeezed for survival, you're bound to pass up on going to the doctor to check on a suspicious mole or cough. "You may even forgo chemotherapy because you simply can't afford to pay the 2,000-euro price tag on the medicine."

The medical journal The Lancet recently published a study showing that about 15% of crisis-hit Greeks were less likely to seek help for medical or dental health purposes in 2009 than they were in 2007. That percentage, experts say, has now, more than doubled. Officials in Athens have criticised the Lancet report, billing its findings "premature". No state doctor, they insist, has been ordered to turn down jobless patients. "Whether doctors expect a little something on the side or a fat envelope with cash to get treated - that is something we are cracking down on," said health ministry official Efthimios Kardaras. Just over a decade ago, the World Health Organization ranked the Greek healthcare system as the 14th best in overall assessment and 11th - higher than Germany and the UK - in quality service. But since then, attempts to provide Greek citizens with universal health access has met fierce resistance from interest groups, mainly private doctors and clinics.

More BBC News - Euro crisis: Why Greece is the sick man of Europe
 
Granny sellin' off her Grecian urn stock, gonna put it in Halliburton...
:eusa_eh:
Greece Likely to Need Another $20 Billion to Cut Debt
February 02, 2012 - Financial experts are concluding that Greece may need another $20 billion cash infusion even if it eventually completes contentious negotiations with its private creditors to cut in half the money it owes them.
For weeks now, the Athens government has been attempting to finish talks with 32 large financial institutions to trim $130 billion of its debt. The goal is to cut Greece's debt so that over the coming years it would total no more than 120 percent of the country's annual economic output. But European officials and the International Monetary Fund reached the conclusion this week that even as the private creditors assume losses that could total more than two-thirds of the amount they lent Greece, it still will not be enough to put the country on sound economic footing. News agencies Thursday quoted officials as saying the prospective shortfall is $20 billion.

Now the question is how the gap could be covered. Some European officials have suggested that the European Central Bank, or the 16 nations in the eurozone currency bloc other than Greece, should contribute toward a solution. But Europe's economic powerhouse, Germany, is balking. German Finance Minister Wolfgang Schaeuble said there is "no need" for further public assistance for Greece. Aside from the deal with its private creditors, Greece is faced with imposing more unpopular austerity measures, even as it seeks a new $169 billion bailout, its second in two years. Athens says it will default on $19 billion in bonds in March without the new funding.

The head of the Greek Orthodox Church, Archbishop Ieronymos, urged the Greek government Thursday to reject what he described as "foreigners' blackmail and fatal recipes" for solving the country's economic woes. In a letter to Greek Prime Minister Lucas Papademos, the cleric said rising poverty in the county could trigger a "social explosion." Meanwhile, China says it is considering increasing its investment in Europe's rescue funds for debt-ridden countries, and possibly providing aid through the International Monetary Fund. After meeting with German Chancellor Angela Merkel in Beijing, Premier Wen Jiabao said China could invest in Europe's temporary bailout fund, or the new $656 billion permanent fund set to start in July.

Wen said it is "very urgent and important" to resolve Europe's two-year governmental debt crisis. He said China supports Europe's efforts and that it has confidence in the continent's economy. China has $3.2 trillion in foreign exchange reserves, but Wen made no explicit commitments to provide more aid. Merkel said the 17 countries in the European bloc that use the euro currency have to be disciplined in their spending and cannot continue to roll over their current debts without reducing them. She said the eurozone nations must collectively work to protect the euro.

MORE
 
There are several reasons why we shouldnt act like Italy and Greece. There are differences:

1) We don't have anyone to bail us out.
2) Our debt is far worse
3) We still have people willing to fight to cut spending here.
 
The US treasury and FED are propping up European banks and nations right now.
 
It's funny when people quote an OpEd and present it as fact. It's called an OpEd for a reason... the reason being.... it's a fucking Opinion, it's not fact.

Another fail by Fail&Won'tGo.
 
When I'm given the choice between believing Paul Krugman, a Nobel Prize winning PhD in Economics and some yahoos on an internet site I'll take Professor Krugman's view as representing economic reality every time over the right-wing yahoos. So I want to thank the original poster for providing us with this useful information, it helps give insight for those who will read and pay attention and if the yahoos don't get it, well, so what?
 
So let me see if I understand the "reasoning" here...

We're not headed down the same path as Greece and Italy because people are still willing to buy our debt? That's Krugman's brilliant analysis? Gee, Paul...are people putting their money into US bonds because we're so strong and doing the right things economically...or because the alternatives are so God awful bad? The reason Greece is paying 7% is because nobody wants to risk their money in a country that will most likely default on it's loans. Instead they are putting their money into US bonds which is holding the interest rate we pay at a lower rate. To say that we are somehow "different" than Greece because people are still seeing us as a less risky choice than some really bad choices is idiotic. If we don't get our fiscal house in order than we will become Greece with the difference being there won't be anyone around big enough to bail us out.
 
When I'm given the choice between believing Paul Krugman, a Nobel Prize winning PhD in Economics and some yahoos on an internet site I'll take Professor Krugman's view as representing economic reality every time over the right-wing yahoos. So I want to thank the original poster for providing us with this useful information, it helps give insight for those who will read and pay attention and if the yahoos don't get it, well, so what?

Yeah, that Nobel Prize means so much these days! Obama got one just for showing up. The Nobel Prize is more about politics these days than achievement.
 
When I'm given the choice between believing Paul Krugman, a Nobel Prize winning PhD in Economics and some yahoos on an internet site I'll take Professor Krugman's view as representing economic reality every time over the right-wing yahoos. So I want to thank the original poster for providing us with this useful information, it helps give insight for those who will read and pay attention and if the yahoos don't get it, well, so what?

Really? I tend to think for myself and make my own decisions. But to each his own.
 

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