Greek Life

Thanks to Wikicommons.

Here in the US, the economy seems to be constantly in the news.  However, we at USDemocrazy were alarmed to discover that  WE ARE NOT ALONE! (Economically speaking, anyway.)

As shown in the lovely Foreign Policy graph above, Europe’s PIIGS (Portugal, Ireland, Italy, Greece, & Spain are in big trouble. In a critical economic indicator, they all have debt to GDP (gross domestic product) ratios worse than ours.

Now you may say the chart makes the US look remarkably PIIG-like. But Annie Lowrey, author of the above-noted article has a counter.

She notes that the US

has much lower debt costs; much of the country’s debt is basically free, due to the dollar’s status as the world’s reserve currency

Of the PIIGS (we just love that acronym), Greece is in the worse shape.

In fact it is currently attempting to make hard cuts to reduce its deficit from 12.7% of the countries GDP to 3% by 2012.

If things go bad and Greece defaults on its loan, will it be another brutal blow to the global economy?

Paul Krugman (economist extraordinaire), writing for the New York Times posts this delicious pie chart:

Thanks to Paul Krugman

He follows his chart up, commenting:

Overall, the group of stressed economies account for about 20 percent of the eurozone’s GDP. So even a sharp fiscal retrenchment wouldn’t be all that big a shock; still, it certainly wouldn’t help.

The lovely Economist blog, Free Exchange, has a far gloomier view than Paul Krugman’s, noting:

the potential for real trouble in Europe is that a failure to adequately address crisis in Greece may tip a financial system that is still very wobbly back into panic.

At the Daily Beast, Jeffery E. Garten worries

that although Greek debt is relatively much larger compared to its GDP than others in Europe or compared to the U.S., we may be witnessing the opening salvo in a decade-long struggle of the West to come to terms with the horrendous public debts

Now don’t worry, the game is not up for Greece. (=Sorry — no buying the Parthenon at a repossession auction).  France and Germany have vaguely hinted that they will provide support to keep Greece above water.

What should you as readers take away from the Greek crisis?

1. The economic roller coaster has yet to come to a stop.
2. We shouldn’t be jumping for joy that others have a larger deficit than ours.
3. ???

Now you may ask what the question marks are for.  We want YOU to tell us what you took away from this article.  From our high and mighty news thrones we hear little of our readers voice and would like to hear a little more.