Lessons for US in Greek debt deal?

The Greek parliament approved a new round of budget cuts, including lowering the minimum wage and cutting 20 percent of civil service jobs. Is there a lesson here for Washington?

(AP Photo/Petros Giannakouris)
A municipality worker cleans up outside a burned bank in central Athens, Monday Feb. 13, 2012, following a night of rioting after lawmakers approved new austerity measures demanded by bailout creditors to save the nation from bankruptcy.

Greece has approved a package of reduced government spending to gain additional bailout funds from a troika of European and international groups. That package sparked massive outrage in the streets of Athens as Americans were going to sleep Sunday night.

Public Notice, an advocacy group dedicated to responsible government spending, is rolling out the ad above on national news networks starting Monday morning. It’s part of their “Washington Could Learn A Lot” campaign, which now adds Greece to the likes of Urkel and The Comb Over.

The ad uses language to similar to what many conservative American politicians and activists have employed, particularly at last week’s Conservative Political Action Conference where one unnamed Republican candidate dropped the following line to Slate’s Dave Weigel:

daveweigel @daveweigel

"Joke from a candidate I'm covering: "What's the difference between America and Greece? Eight months." #wakawaka #CPAC2012"

Of course, the fiscal situation in the US and Greece are different by many orders of magnitude - read this somewhat outdated but generally useful write up by CNN on the subject.

 Here are a two other ways to understand the relative size of Greece’s financial wherewithal versus America’s:

  • Greece is getting a $170 billion bailout package, which would close about 16 percent of the budget deficit President Obama plans to run in the US this year. In other words, the thing that is sending rioters into the streets in Greece would be a drop in the bucket in the American context.
  • The US is the world’s largest economy at north of $15 trillion, with a “T,” in gross domestic product, or GDP. Greece is the world’s 41st largest economy at $305.6 billion, with a “B,” in GDP. Why do you care about the size of the economy? Because the ability to grow out of debt problems by changing economic policy is much stronger in a massive economy than in a medium to small one.

However, as your faithful Decoder wrote last week at CPAC, economic issues are receding from the political conversation even among America’s most ardent conservatives.

Which is astounding, given the tall structural - meaning they are baked into America’s current economic/government spending system - problems the US has. Read this outstanding New York Times piece for more on the political issues around America’s biggest spending problems.

So could the US learn from Greece’s austerity plan? Hardly. Could America benefit from a sharper, and longer lasting, focus on financial issues? You bet.

Like your politics unscrambled? Check out DCDecoder.com

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