The problem, in my opinion (since you asked), is Greece's economy is 3/4 a service economy. They rely on tourism and export very few goods because production makes up a small part of their economy.

There is a realistic *fear that the US has shifted from a prominent industrialized production economy to an economy relying heavily on providing services. I heard somewhere the other day that during the Great Depression something like 40% of employment was in the farming industry. Now that makes up something like 4%. Also I believe our production of goods is close to the ratio of Greece's (1/4th of the GDP).

I'm too lazy to google it and provide proof.

Adding video to channels (Fear) - requested by blankfist.

You might be right, but I know there are a complex set of issues involved in the national debts of most industrialized nations. That's why I was asking, because even though I think he offers some good reasoning, it just sounds a little simplistic to me. I don't like Republican fearmongering about our debt, but I can't help but wonder when we're ever going to get it under control. I don't want my son to live in Greece 2.0 when he's around my age.
>> ^blankfist:

The problem, in my opinion (since you asked), is Greece's economy is 3/4 a service economy. They rely on tourism and export very few goods because production makes up a small part of their economy.
There is a realistic fear that the US has shifted from a prominent industrialized production economy to an economy relying heavily on providing services. I heard somewhere the other day that during the Great Depression something like 40% of employment was in the farming industry. Now that makes up something like 4%. Also I believe our production of goods is close to the ratio of Greece's (1/4th of the GDP).
I'm too lazy to google it and provide proof.

Well, Republicans are going to yell "the sky is falling!" because for them whatever the Dems believe they must believe the opposite. The same goes for Dems.

I'm worried about bailing Europe out, because that will create more inflation here in the US. Prices are already going up, and if we start trying to carry the weight of the world we'll end up devaluing the dollar more through hyperinflation. That's a realistic fear.

Another side to it is that paper currency is showing its weakness. Once a Republic (or Democracy) learns it can vote to print more money, that's the hail for the end of the economy. Gold cannot be printed. Gold has been currency for 6000 years, and I doubt it will be going anywhere. It's time we start thinking about going back to a value backed currency like gold and stop giving the government a blank check to mortgage our children's future.

Seder's right, it's bullshit. He didn't really make it super-clear why, but the reason we know this is because a) the bond market understands this stuff better than we do, and b) our 10-year bond interest rate is low. It's the low interest rate that's the real giveaway, not that people are still buying them. It's that our debt is still cheap.

See, if the market were worried that we'd default on our debt, they would demand a greater rate of return on the investment before buying it. They aren't, so they're not.

That's the "I don't know anything about the underlying economics, I just know how to read the market's tea leaves" answer.

Here's Krugman's take on why the market isn't nearly so worried about us as it is about Greece, and his take on why fears about "becoming Greece" may turn us into Japan.

And this is what I meant by bailing out Europe: http://washingtonindependent.com/84329/fed-opens-currency-swap-lines-with-europe

Also bailouts from the IMF: http://www.moneycontrol.com/news/economy/imf-bailout-not-enough-to-cure-greek-crisis-say-experts_456555.html

>> ^blankfist:

Well, Republicans are going to yell "the sky is falling!" because for them whatever the Dems believe they must believe the opposite. The same goes for Dems.

Ahh, if only we could all be principled libertarians, and scream "the sky is falling" all the time.

For example:

>> ^blankfist:
I'm worried about bailing Europe out, because that will create more inflation here in the US. Prices are already going up, and if we start trying to carry the weight of the world we'll end up devaluing the dollar more through hyperinflation. That's a realistic fear.

No, prices aren't going up, and no, hyperinflation isn't a realistic fear.

I'm leaning kinda heavily on Krugman because he's written some killer stuff on this in the last week or two, and I've been itching to link it in your general direction.

http://www.usdebtclock.org/

I didn't link the clock because it supports my argument, but because it's pretty cool.

Politicians and agendas?

When China stops buying the US debt, the US Crash will be far greater than Greece.

The accusation that America is 'becoming Greece' is not unfounded. Greece is foundering because it has billions in unfunded liabilities and no effective way to pay them. This precise malady is already happening in the US. California, NY, Illinois, and other liberally controlled states are bankrupt because of huge social obligations they can't possibly pay for.

The U.S. has been headed this way for decades in a slow way, but it's ramped up rapidly under Clinton, Bush, and Obama. Medicare, Medicaid, and Social security are plummeting into insolvency. The Health Care plan increases federal obligations by billions. Cap & Trade constricts energy supply while increasing costs. Every act the federal government takes is one that pulls money from the private sector into the public sector.

The warning cry that America is heading towards a "Greece" style fiscal meltdown is blatantly obvious and even laypersons can easily see that unbridled, unchecked social spending is what has ruined Europe's economy.

This is - of course - exactly why left wing koolaid drinkers like this video guy are in a state of panic. The European collapse strips away the lie that they have been living in for decades. It proves cradle-to-grave liberal socialist states are only 3 hairs and some air away from collapse, and that capitalism is the solution. "Austerity measures..." What a nice left wing whitewash of the fact that they are being forced by necessitiy to use (GASP!) conservative economic policy in order to prevent themselves from absolute self destruction. So to save it's @$$, Greece is having to privitize health care, as well as cut bloated, unsustainable social spending. Gee - where have we heard that before?

So it's no surprise that leftist hacks like Krugman are in denial over this. The entire approach they've believed in their whole lives has been proven to be a total sham.

I don't quite follow your logic. Professional, technical or scientific services industries are far less likely to abruptly shift to another country. On the other hand many commodities generated from farming are highly fungible in the source of their production because they are generally homogeneous between countries. Tourism, especially inter-country, you would similarly expect to be replaceable with other countries and far more variable in terms of the revenue it brings in dependent on economic conditions, given that its a want not a need.
>> ^blankfist:

The problem, in my opinion (since you asked), is Greece's economy is 3/4 a service economy. They rely on tourism and export very few goods because production makes up a small part of their economy.
There is a realistic fear that the US has shifted from a prominent industrialized production economy to an economy relying heavily on providing services. I heard somewhere the other day that during the Great Depression something like 40% of employment was in the farming industry. Now that makes up something like 4%. Also I believe our production of goods is close to the ratio of Greece's (1/4th of the GDP).
I'm too lazy to google it and provide proof.

^blankfist:
I heard somewhere the other day that during the Great Depression something like 40% of employment was in the farming industry. Now that makes up something like 4%.


I'm not sure about the actual numbers, but that trend seems reasonable.

Far fewer people are needed for the same amount of agricultural output now compared to the early 1900s. That happens with any industry that transitions from human labor to automation.

>> ^RedSky:

I don't quite follow your logic. Professional, technical or scientific services industries are far less likely to abruptly shift to another country. On the other hand many commodities generated from farming are highly fungible in the source of their production because they are generally homogeneous between countries. Tourism, especially inter-country, you would similarly expect to be replaceable with other countries and far more variable in terms of the revenue it brings in dependent on economic conditions, given that its a want not a need.


I don't disagree with that. I don't think we have to worry about many "services" transitioning out of the US into another country. Production, however, can and will easily shift to where labor is cheaper.

The only part I disagree with is how you say tourism is "replaceable" as if you're likening it to fungible goods. Tourism services aren't fungible (no service is fungible), and in fact the cost of these services are dependent on the local economy. I'd argue, as we're seeing in Greece, a large service economy cannot remain sustainable in the long-term without a healthy production economy.

>> ^Winstonfield_Pennypacker:

The accusation that America is 'becoming Greece' is not unfounded. Greece is foundering because it has billions in unfunded liabilities and no effective way to pay them.

[snip]

"Austerity measures..." What a nice left wing whitewash of the fact that they are being forced by necessitiy to use (GASP!) conservative economic policy in order to prevent themselves from absolute self destruction. So to save it's @$$, Greece is having to privitize health care, as well as cut bloated, unsustainable social spending. Gee - where have we heard that before?

You gave a pretty much content-free "Grr, I hate liberals" comment there.

Not that you've ever shown any interest in facts, but here is a summary of the austerity measures the IMF is demanding of Greece.

They're not privatizing their health care, they're rolling back some recent pay increases for public sector jobs, they're raising the retirement age, and they're raising taxes.

Which is of course, one way they could have avoided the problem in the first place. Greece is in the middle of the pack in terms of government spending to GDP ratio within the EU. Where it does stands out is on the tax side of the equation...