Greece owes the world $300 billion.
The country is drowning in debt.
Is this our future?
Video.
Transcript
BRET BAIER: The European Union has agreed to a bailout of $41 billion to Greece. Greece is in serious problem, financial economic chaos, as Greece owes the world $300 billion. And protesters are taking to the street there.
We're back with our panel. Charles, what about this and what does it mean for the world?
CHARLES KRAUTHAMMER: Well, I think it is a threat to the European Union because they have a requirement that if you want to join the euro zone, if you want to be part of the currency, you can have a deficit no higher than 3 percent of your GDP. And as you said, Greece is in at 13 percent, which means it's wildly out of control. And, you know, either you're in or out. If you're going to stay in you have to bring it down, which the Greeks are completely unable to. So, unless they get a bailout, it's the beginning of the end. I think the other southern states in Europe already have high deficits.
But from an American perspective, that's the future.
We now have a GDP of a deficit this year of over 10 percent, which is wildly out of control -- 10 percent of our gross domestic product. If we stay on course, and the most optimistic estimates out of the CBO are that we are going to have a national debt, a total accumulated debt in 10 years of about 100 percent, 90 percent of our GDP, in which case we become Greece. And we get complete instability, either hyperinflation, interest rates out of control.
It means that we have to start now with deficit reduction because once we're on our way it's almost impossible to go in reverse. And that's why I've been talking about for weeks here - VAT. I don't see any other way than raising taxes, which is a national sales tax, and could be a gusher of revenue.
BAIER: Because who's going to bail out the U.S.?
KRAUTHAMMER: Nobody. I mean, we are the backstop, and there's nobody behind us the way you have the EU behind Greece.
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Read Krauthammer's column, "The VAT Cometh."
1 comment:
Perhaps he has been reading my blog...there is much to say about this parallel. The differences are as interesting as the similarities, but offer no comfort for the beleaguered USA.
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