Conservative Media Promote Bogus Chart On National Debt
Fox News and right-wing blogs have promoted a chart that purports to show the "alarming" fact that national debt per person is higher in the United States than in several crisis-stricken European countries. This comparison is flawed because these countries' economies are fundamentally different -- a fact demonstrated by the substantially higher interest rates that the crisis countries using the euro must pay on their debt, compared to countries that can borrow in their own currency.
Fox, Right-Wing Blogs Promote Chart Comparing U.S. To Eurozone Debt
Weekly Standard Publishes Chart From GOP Sen. Sessions. From The Weekly Standard's blog:
The office of Senator Jeff Sessions, ranking member on the Senate Budget Committee, sends along this chart, showing that 'America's Per Capita Government Debt Worse Than Greece,' as well as Ireland, Italy, France, Portugal, and Spain:
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In Reality, Problem Facing Greece And The Eurozone Is "Impossible Here"
Bartlett: "The Sort Of Problem Greece Is Experiencing Is Impossible Here." In a June 14, 2010, blog post, former Bush Treasury official and conservative economist Bruce Bartlett noted that "the sort of problem Greece is experiencing is impossible here." From Bartlett's blog post:
The recent financial crisis in Greece has led to a lot of discussion about whether the United States might one day have a public debt so large that default becomes a real possibility. While the sort of problem Greece is experiencing is impossible here, we have another problem that, to my knowledge, no other nation on Earth has: a legal limit on government debt that Congress must raise periodically. This peculiarity of our fiscal system could indeed lead to a default on the debt, with repercussions that advocates of default -- yes, they exist -- have absolutely no clue about.
The main reason the U.S. cannot suffer the sort of debt problems of Greece and other eurozone countries is that all our debt is denominated in dollars, of which we essentially have an unlimited supply. Because its monetary policy is controlled by the European Central Bank, Greece can't just print euros the way we can print dollars. And the Federal Reserve will always ensure the success of a Treasury bond auction. De facto monetization of the debt could be inflationary, but default resulting from a lack of demand for Treasury bonds is not really possible. (Capital Gains And Games, 6/14/10)
full: http://mediamatters.org/research/201202290017