An article recently written by Casey Harper over at The Daily Caller leads many to believe that the health of the United States economy is approaching that of Greece’s.
(Edits Made)
Harper attempts to draw connections between the United States and Greek?economy using debt level as the point of comparison.
He mentions that 25 years ago, Greek debt was equal to 75% of its economy. Now, that rate has jumped to 175%.
Harper then uses a 24-year prediction by the Heritage Foundation that claims that the United States debt will be 180% by the year 2039.
Finally, the question was asked:
“If America today is Greece 25 years ago, that?raises the question: will the U.S. be in the same trouble as Greece 25 years from now?”
A pretty logical and flawless argument so far, right? Wrong.
First, attempting to compare the United States and Greek economies is nearly impossible for two reasons:
1.?The Greek economy is located within the EU and uses the Euro. Therefore, its currency is dictated by 18 other countries, thereby leaving Greece unable to determine its policies to regulate its economy.
2. The United States Federal Reserve has the ability to regulate its money supply and change its monetary policy that best fits the United States economy. Greece, on the other hand, does not have such capacity.
However, Harper wasn’t done as he called in for help from the Heritage Foundation.
Romina Boccia, a budget expert at the Heritage Foundation,?says:
“The American debt is not as big of a problem because we are able to monetize our debt by printing money to pay off loans, unlike Greece which is on the Euro. Instead of growing debt, the U.S. grows inflation, but that can only continue for so long.”
Wait, isn’t the U.S. inflation rate 0%? Why yes it is. Boccia’s claim is purely fabrication as the US inflation rate has been dropping steadily since 2011.
Furthermore, the ideas presented by Boccia and Harper are what I like to include in the “cut everything, including the muscle” rule, which means that if something is not an absolute necessity, then it must be cut. Consequently, this would constrain the ability for an economy to grow and expand.
Moreover, the “danger zone” used by Boccia and Harper assumes that the Greek and United States economies are on the same path when they are not. This is the case despite the fact that the Heritage Foundation tried to graph out debt?projections:
Finally, if you didn’t pick up on the source, then take a look at the bottom of the picture. Doesn’t the Heritage Foundation sound familiar? If not, then this foundation is a Conservative think tank that pushes a balanced budget (never happened), prosperity through reduced taxation (economically impossible), and economic growth through spending cuts (illogical).
Articles like that of Casey Harper’s are far too common, which explains why it’s our job to debunk the myths and “facts” that are used in them to uncover the actual truth and provide sound logic.
