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How much debt did Greece have before it finally went bankrupt?
by webinvest 6y ago
How much debt did Greece have before it finally went bankrupt?
- mempko 6y agoGreece isn't a sovereign state. It's part of the EU. Very different than the USA which controls it's own currency. US debt in the form of treasury bonds just provides the private sector (usually wealthy) with an interest bearing checking account. US doesn't even have to sell bonds. In fact, it spends first and THEN sells bonds.
- djohnston 6y agoYeah this was one of the main points of the book IIRC. If you have a sovereign currency the idea of balancing your budget like a household isn't an apt analogy. If you belong to the EU, then you need to think like that. Makes the UK seem smart for insisting on maintaining the GBP, though personally I think Brexit wasn't a good move.
- webinvest 6y agoSure, maybe Greece’s debt was denominated in Euros and Greece can’t print Euros. But the US is in a different position because it has the world’s reserve currency. It maintains that position by simply depreciating less than all of the other major world currencies. If it looses that position, it would have disastrous effects on the purchasing power of the US relative to other counties.
- mempko 6y agoWhat about UK, or Japan, or China, which don't have reserve currencies right? They run deficits just like the US. It turns out, if your economy has productive capacity, it isn't really a problem to print your own currency. Economies that have trouble are those that are strapped for HARD resources (real stuff).
- scsilver 6y agoGreece specifically does not have the worlds reserve currency and cant print more raffle tickets.
- valuearb 6y agoIt wasn't debt, it was savings!