Story from CNS News featuring lots of quotes from people I like.
Brian Riedl, lead budget analyst at The Heritage Foundation, agrees that unless the federal government radically curtails spending, a debt crisis as severe as or worse than that now happening in Greece will erupt in the United States in as soon as seven to 10 years.
“We can say that we will be at about the Greek level of debt probably in the next seven to 10 years,” Riedl told CNSNews.com. “There is no reason that with the same economic policies at the same level of debt, that the United States won’t face the same economic and financial crisis as Greece.”
But for Reidl, who recently issued his own report on federal spending, seven to 10 years may be too optimistic.
“It’s very tough to predict when a financial crisis will hit, because much of it depends on bond market psychology,” Reidl said. “As soon as the bond market decides the U.S. may not be able to fully service its debts, they will respond with a flight from our currency. When the bond market makes that decision is really anybody’s guess. It could be two to three years from now, it could be 10 years from now.”
[…]When Greece started to admit its debt problems last November, the government estimated its deficit last year was 12.7 percent of its GDP – a figure that Eurostat, the European Commission’s official statistics agency, said was too low and which it revised to upward 13.6 percent.
Meanwhile, the U.S. deficit is on track to become 10.3 percent of GDP in 2010 under President Obama’s budget.
In his report, “Federal Spending by the Numbers,” Reidl pointed out that the projected 2010 U.S. deficit would represent the biggest percentage of GDP the United States has seen since World War II.
That same report shows that average deficits over the next 10 years will be almost $1 trillion instead of returning to pre-recession levels of $100 billion to $400 billion. The projected deficits, Riedl pointed out, would double the current national debt.
However, spending — not shrinking revenue — is the principal cause, according to the report, which said “90 percent of the rising long-term budget deficits are driven by rising spending,” and just 10 percent of the rising deficits are caused by falling revenues.
“This is 100 percent a spending problem in the long term,” Reidl said.
The article also cites two budget experts Sen. Judd Gregg and Rep. Paul Ryan, who agree with Reidl that we will be where Greece is now in about 7 years. The IMF was there to bail out Greece with European and American money. But who will bail out the USA?