But they're all missing the point. Here's the important thing:
It's a bust we need, not a boom.
What? Huh? What the heck are we talking about?
Here is a typical worrier, giving us reasons not to worry. From Pedro da Costa at Reuters:
Is the U.S. on the road to Greece, as some politicians have proclaimed?
Most economists say the comparison is nonsense. At a towering $15 trillion, the U.S. economy is not only the world's largest, it is also more than 50 times the size of Greece's. This gap makes any type of comparison difficult -- it would be like analyzing trends in Maryland in relation to the entire euro zone.
Another key difference: Unlike Greece, the U.S. actually controls its own currency. That means a debt default is effectively impossible. This reality, coupled with strong monetary stimulus from the Federal Reserve, helps explain why U.S. bond yields remain near historic lows despite larger deficits.
Mark Weisbrot, co-director of the progressive Center for Economic and Policy Research in Washington, says a country's interest burden is far more important than its total debt levels in determining the government's ability to service it. He argued in a recent editorial:
Contrary to popular nonsense about America "ending up like Greece," the U.S. doesn't even have a public debt problem. Net interest on the federal debt is currently less than 1 percent of our national income, the lowest it has been in more than 60 years. And it's the interest burden that matters, not the big numbers like $16 trillion that are thrown around in scare stories.
But here is where it gets interesting. We don't have to worry, says Mr. da Costa, because we "owe it to ourselves:"
[T]hat's why Japan has no problem even though its gross debt is about 220% of GDP. About half is owed to the central bank. What this means is the interest on that debt goes back to the Treasury. Our Treasury now receives about $80 billion annually from debt held by the Fed.
Running Out of Gas Is this fellow out of his mind?
Nah… He's got a good point. As long as the central bank finances deficits you don't have to worry about borrowing costs. We can continue on our merry way!
But sometimes a bust is better than a boom
Greece is running out of gas. It has out a roadmap. It has turned on the GPS. It aims to go where many other nations have gone in the past. It aims to continue spending more than it can afford for as long as it can.
But the poor Greeks have the Germans on their backs. They can't just print up more currency to help them on their way. They don't have their own central bank. They use the euro… which is still dominated by German bankers.
So, if the poor Greeks are going to go further into debt, it will only be with the complicity of lenders… who are growing wary. Greece is broken down in bust territory.
The Land of No ReturnThe U.S. doesn't have those troubles. America is not Greece. It will be able to get where it is going… thanks to its very own central bank and the delusions of lenders everywhere.
As long as the Fed will print money, America can stay on course, stepping on the gas and driving further and further into the land from which no one returns solvent.
Lenders won't stop it. Germany won't stop it. The "fiscal cliff" will only slow it down momentarily.
The U.S. will go all the way, we predict, all the way to the jaws of Hell.
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