This is why austerity will fail. It is not politically sustainable. No combination of higher taxes and austerity will save them (or us). In the end Greece will default. I am frankly surprised they haven’t already done so.  The US is a different situation.  Our debt is denominated in our own currency so there is no question of overt default. We will continue to monetize the debt and print our way out of the hole.

On a human note this is incredibly tragic. All the more so because in Greece suicide still carries a huge stigma.  99% of the population is Greek Orthodox and the Church generally will not perform funerals for suicides or allow them to be interred in consecrated ground.  Burial space in Greece is hard to come by as it is and most of it is owned by the Church.  Those who die in Greece outside of the Orthodox Church often have to be cremated or buried outside the country.

We will continue to monetize the debt and print our way out of the hole

I am up-front admitting to not being an expert in economics and high finance, but is monetizing our debt really able to get us out of the hole?

What if a nervous mid-east country starts demanding oil payments from us in gold?  We sure don’t hold enough gold to keep us going for long.  And if the value of our currency is in freefall by running the printing presses, we can’t buy enough gold to get enough oil to run the country.  Then we have no food, lights, transport, etc.

Like I say, not an expert, so would appreciate a theory on how this could work?

By the way, I agree that voluntary austerity is not likely to work.  I don’t think it will even get a try out in this country.  We’ll just go from blissful ignorance to appalling circumstances.  Then those who are so opposed to “draconian cuts” in entitlements will find out what that really looks like instead of the rational reforms that some republicans have put forward.

Printing money without anything to back it will devalue the dollar both within and without the USA.

Within the USA, the effect will be to reduce the actual buying power of those who “have” and will reduce their economic situation to the level of the “have nots.”

This sure seems like one way to “redistribute the wealth” by making everbody equally poor.

Another Trojan Horse?  Think about it.

Re #3
Captain Warren
Our creditors bought US Bonds which are denominated in US Dollars.  Since 1971 our currency has been fiat (i.e. it is backed only by public faith and confidence). Which is to say that people cannot demand payment of our debts in gold or oil. They can, and I suspect at some point will, refuse to buy any more of our bonds.  But since last year the Federal Reserve bought 60% of all bonds issued by the Treasury that threat is largely an empty one. 

The Fed will continue in the coming years to monetize our debt (in other words they will “print” money and then use it to purchase government bonds).  Of course this will have highly deleterious effects.  When you flood the world with paper money you are debasing the currency and creating monetary inflation which will eventually translate into price inflation.

We are in very deep trouble.  The national debt is a bi-partisan train wreck and I think we have gone beyond the point of no return though I hope I am wrong. At some point we are going to hit a brick wall called “reality” and then it is going to get ugly fast.

If you have a lot patience with charts and statistics I encourage you to read a book called “This Time is Different: Eight Centuries of Fiscal Folly” by professors Reinnhart and Rogoff.  It is one of the most sobering books I have ever read.

6, and yet the smallest effort to curb the rate of spending increase, not even a real cut, is instantly demagogued as:  Throwing granny off the cliff, throwing women and children on the streets, emptying libraries of books etc.  Every penny is sacrosanct and nothing can be done except spend more.

#6 Thanks and Br. M it is amazing that every penny of spending is sacrosanct; and the people to a large extent believe that not one single thing, not one “green project”, not one GSA convention can be cut.  I think that tells us everything we need to know about the future trajectory of our country.