You've heard the numbers. At the end of 2009, our national debt was $7.5 trillion. That means today, each American family's share of the debt is about $115,000. If this President's budget becomes law, in ten years our debt will exceed $20 trillion and each family will owe around $200,000. Interest payments will have to quadruple during the next decade. With more of our tax dollars disappearing to debt service, Americans will be paying more and getting less.
Yet Americans are now learning that it isn't just our profligate politicians that we have to foot the bill for.
The Greek government, like those of most developed nations, has been living well beyond its means. In 2009, Greece ran a one year deficit of 13.6 percent of GDP and total debt reached 115 percent of GDP. Recognizing that there was no end to Greece's borrowing and over-spending, creditors became nervous about the government's ability to pay back the loans. Greece's debt rating was reduced to “junk” and interest rates soared, which made Greek budget problems even worse. Greece has been trying to cut spending and curtail benefits. Appallingly, the public has been rioting in response.
The situation in Greece should be nothing more than a “teachable” moment for the United States. Greece provides a real world example of what happens when a government consistently spends more than it takes in and promises its citizenry more benefits than the country can afford.
Unfortunately, however, the United States isn't just previewing our future without reform. Greece's problems have become the world's problems, and therefore the United States' problems. The international community has pledged aid to Greece, which means that the American taxpayers will face a steep bill.
To help prevent Greek default, the International Monetary Fund (IMF) plans to provide Greece $39 billion. Given that U.S. taxpayers provide 17 percent of the IMF's money, Americans can expect to hand over about $6.6 billion to the Greeks.