Reality Check: What Can The U.S. Learn From Greece?
(FOX19) - The Greek Parliament voted to approve the nation's austerity cuts.
The cuts are meant to slash spending in Greece which is on the verge of collapse and is asking the European Union for a bailout.
No doubt you have seen the video of the riots taking place in Greece. Thousands of protestors are in the streets and demonstrations turned violent for a second day when a surge in the crowd overturned metal barriers, forcing back a line of riot police, who responded with flash bombs and tear gas.
So why are the people rioting in the streets and what is Greece's problem?
Years of unrestrained spending, massive entitlement programs, cheap lending and failure to stop spending money even as the country was running out are the core of the problem.
Also, a massive national debt. Right now Greece's debt approaching 150 percent of its gross domestic product.
The riots have come from young Greeks who are going to suffer at the hands of those cuts. They are angry that the government help they have received and been promised for generations is about to disappear.
So, they are rioting.
Wednesday, the Greek Parliament took the first step toward massive cuts into social programs
Greece has to make these cuts because they are asking for a bailout from the European Union.
If they don't make the cuts, they won't be lent the money. Greece really has no choice.
There is a big lesson for the United States in all of this. By 2016, Greece's debt-to-GDP ratio is predicted to be 145.5%
Well, consider this, here in the United States, in the same year, 2016, we can expect our debt to GDP to be 112%