David Leonhardt warns in the New York Times today of the parallels between Greece and the US. "The basic problem is the same," he says. "Both countries have a bigger government than they're paying for." He cites a stat showing that our federal debt is projected to equal 140% of GDP within 20 years. Greece's current debt is at 115%. People want their government services and low taxes, and "dealing with this disconnect will be the central economic issue of the next decade, in Europe, Japan and this country."
Reading this caused Times colleague Paul Krugman to spit out his coffee (we're guessing). It doesn't make sense to compare our projected debt (in 20 years, no less) with Greece's current debt, he writes on his blog. "Basically, the United States can expect economic recovery to bring the deficit down substantially; Greece, which has a larger structural deficit and also faces a grinding adjustment to overvaluation with the eurozone, can’t." We do need "fiscal adjustment," he writes. "But we really don’t look much like Greece."