Perhaps the most important difference between the two countries is that the U.S. prints its own currency, meaning it can essentially create money out of thin air. (The Federal Reserve usually does this by buying U.S. government debt from banks, crediting those banks’ accounts with dollars that hadn’t existed before.) By contrast, when Greece borrows money, it borrows Euros, a currency over which it has no control. The upshot is that there is essentially no risk of default in the classic sense of the term, where markets quickly refuse to fund government operations and the government must resort to swift and deep cuts to government services. If our creditors demand we repay them, we can just print dollars. business.time/2013/03/01/ask-the-expert-when-will-the-federal-debt-cause-a-greece-like-crisis-in-the-u-s/ When Will the Federal Debt Cause a Greece-Like Crisis in the U.S.? | TIME
Posted on: Mon, 01 Jul 2013 08:54:27 +0000
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