World at a Glance: Greece & the U.S.
WORLD AT A GLANCE: Greece & the U.S.
Once again, Greece finds the international community questioning its ability to pay its debts. Default and an exit from the Euro Zone (or countries which share the Euro as a common currency) threatens on the horizon. Here in the U.S., we face high debts and have a lowered credit rating due to Washington’s inability to agree on deficit reduction. Just how alike are our two nations?
Percent of population over 65 today:1
- Greece:19.5 percent
- United States: 13.5 percent
Percent of population over 65 in 20 years:2
- Greece: 25.7 percent
- United States: 19.9
Fertility Rate Per Woman:3
- Greece: 1.4
- United States: 2.1
How We Got Here
STEP 1: Overspending & Debt
The U.S.’s over-spending has led to a deficit that was 8.7 percent of GDP in 20116 and a debt so large that it has surpassed the size of our economy this year7 and on its current course is expected to grow by at least 47 percent8 in the next ten years.
STEP 2: Downgraded Creditworthiness
When it became clear that Greece would not be able to pay its debt without substantial help, the S&P downgraded Greece’s credit rating to “selective default”9 and investors took a major loss on their bonds.
Last year, the U.S.’s inability to agree upon deficit reduction led to the S&P’s first downgrade10 of our credit rating.
STEP 3: Constituent Backlash
While Greece has attempted to solve its fiscal problems in order to qualify for bailouts, voters in Greece are angry with the current economic conditions and struggle to find a leader who can spur the economy and solve Greece’s fiscal situation. The country’s fate remains undecided.11
As the U.S. approaches another election season, voters on the left and right are frustrated by the lack of substantive spending reform and a struggling economy. Many look towards Washington for meaningful reform.
The protests in Greece have shown that Greeks are unsatisfied with the economy that has resulted from excessive government spending. Americans too are in desperate need of jobs and demand deficit reduction from Washington.
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- Organisation for Economic Co-operation and Developent. OECD Factbook 2009: Population aged 65 and over spreadsheet. http://www.oecd- ilibrary.org/economics/oecd-factbook-2009/population-aged-65-and-over_factbook-2009-table4-en ↩
- Organisation for Economic Co-operation and Developent. OECD Factbook 2009: Population aged 65 and over spreadsheet. http://www.oecd-ilibrary.org/economics/oecd-factbook-2009/population-aged-65-and-over_factbook-2009-table4-en ↩
- World Bank. Fertility rate, total (births per woman). Accessed May 11, 2012. http://data.worldbank.org/indicator/SP.DYN.TFRT.IN ↩
- Reuters. Greek 2011 deficit at 9.1 pct of GDP. April 23, 2012. http://www.reuters.com/article/2012/04/23/greece-deficit- idUSA8E8E500820120423 ↩
- BBC. Greek debt raised out of default by Standard and Poor’s. May 2, 2012. http://www.bbc.co.uk/news/business-17922385 ↩
- Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2012 to 2022. January 2012. Summary Table 1. http://cbo.gov/sites/default/files/cbofiles/attachments/01-31-2012_Outlook.pdf ↩
- MSNBC. Nation’s debt passes grim milestone. http://bottomline.msnbc.msn.com/_news/2012/01/09/10076141-nations-debt-passes-grim- milestone?lite ↩
- Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2012 to 2022. January 2012. Pg. 15. http://cbo.gov/sites/default/files/cbofiles/attachments/01-31-2012_Outlook.pdf ↩
- CNN. S&P downgrades Greece. February 27, 2012. http://money.cnn.com/2012/02/27/markets/greece_standard_poors_selective_default/index.htm ↩
- Washington Post: S&P downgrades U.S. credit rating for first time. August 6, 2011. http://www.washingtonpost.com/business/economy/sandp- considering-first-downgrade-of-us-credit-rating/2011/08/05/gIQAqKeIxI_story.html ↩
- Reuters. Greece sinks deeper into crisis, chance of govt fades. May 8, 2012. http://www.reuters.com/article/2012/05/08/us-greece- idUSBRE8440DG20120508 ↩