If the US government doesn’t act soon to reduce the deficit and debt, it will become like Greece in a few years, Sen. Judd Gregg, (R-N.H.), told CNBC Wednesday.
“This nation is on a course where if we don’t do something about it, get federal situation, the fiscal policy [under control], we’re Greece. We’re a banana republic,” said Gregg.
“Our status as a nation is threatened by what we’ve got coming at us in the area of deficit and debt. And it’s only a few more years, at the most, that we have to work with here before the market says, ‘Sorry, your currency is something we can not continue to defend.’ ”
“You’ve gone from 20 percent of GDP to 24 percent of GDP headed toward 28 percent of GDP. That has to be brought under control or basically we’re going to bankrupt the country.”
The sovereign debt crisis is not just a European problem. The US is deep in debt and many US states are on the verge of default and have already resorted to issuing IOUs. Remember, this crisis began in Greece. It then spread to Spain and Portugal. Now Ireland is even worse than Greece was before the EU bailed them out. We should not assume that the crisis will magically end today for no apparent reason. This crisis will get worse until the infected countries, which is most of them, solves the problem. The sovereign debt crisis will remain as long as economic growth remains slow, debt remains high, deficits remain large, and government remains larger than it ought to. In other words, this sovereign debt crisis will be with us for a while.