U.S. Will Be Like Greece in Less Than 3 Years

Former Head of Gov’t Accountability Office: U.S. Less Than 3 Years Away From Being Greece

August 2, 2011

The Blaze - The former comptroller general — which heads the Government Accountability Office — had some unsettling words regarding U.S. debt and the recent debt debate. According to him, the U.S. is on its way to becoming like Greece, whose debt problems have plummeted that country into economic hell.

“We are less than three years away from where Greece had its debt crisis as to where they were from debt to GDP,” David Walker told CNBC.

“We are not exempt from a debt crisis,” he added. “We’re never going to default, because we can print money. At the same point in time, we have serious interest rate risk, we have serious currency risk, we have serious inflation risk over time. If it happens, it will be sudden and it will be very painful.”

He also pointed out that credit agencies downgrading the U.S. are reactionary, meaning by the time one comes the damage may already be done.

CNBC has more from the interview:

As the ratio of its debt to gross national product eclipsed 100 percent and surged toward 150 percent, Greece has twice in the last two years nearly defaulted on its debt. Only successive bailout packages from the European Union and International Monetary Fund prevented catastrophe.

When tolling up all the US debts, including huge unfunded liabilities to Social Security and Medicare, the US is on dangerous ground, Walker said in a CNBC interview.

[...]

The US is nearing the 100 percent threshold which historically shaves about one percentage point off GDP, which was just 1.3 percent for the second quarter and 0.4 percent for the first quarter.

With the recent increase in the debt ceiling and continued higher budget deficits at the federal level, the US is on course for its own crisis, Walker said.

But that’s just the beginning. Just wait until you hear him put the new debt deal numbers into perspective (hint: it barely shaves any money off the country’s unfunded liabilities):