Greece: America’s Future

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As I waited to appear on Larry Kudlow’s show last Friday, I heard Larry announce over and over again that he’s sick of hearing about Greece’s problems.  Greece isn’t America.  The U.S. economy is booming, and Greece can’t hurt it.

I didn’t tell Larry, but I think he was wrong.

Greece’s problems will hurt the American economy because Greece’s problems foreshadow a far more dangerous crash headed to America.

Markets are people.  People react emotionally to rational thought.  People in America see our government adopting the same reckless socialism that destroyed Greece.  They see America’s debt rising like a hydraulic lift, just as Greece’s did.  They hear warnings that Moody’s or Standard & Poor’s may cut the U.S. treasury rating, as they cut Greece’s debt rating today. People realize that Greece is not just a small European country, but also the canary in the debt coal mine. Portugal is next.

Ben Bernanke warned today that our debt and deficits must be dealt with sooner rather than later.

But Obama just borrows and borrows.