A lot of people here seem to have no clue about what's happening in Greece.....

[markpkessinger]

109. Of course not . . .

. . . but then, given that the U.S. has the benefit of a sovereign currency, and that the vast majority of our debt is owed to ourselves, we are not likely to find ourselves in the same situation in which Greece finds itself. Because Greece's debt is primarily external, and because it is not a debt held in Greece's own currency, but is instead tied up in an inflexible, multi-national euro, Greece (and other similarly situated countries in the Euro zone) is deprived of any of the tools it would normally have at its disposal to deal with such debt. (That's why I made reference to the problem of a unified currency absent fiscal and political unity.)

Look, the concept of debt forgiveness or debt write-downs is nearly as old as the concept of debt itself. Indeed, that's precisely what business bankruptcy is. When a business gets in over its head, the courts intervene between the business and its creditors and come to a solution that restructures, and in some cases, writes down existing debt to a level that allows it to reorganize and work its way out of its over-extended situation. And generally, the business's creditors will wind up getting paid back more than they would have if they had simply kept on insisting the business meet the full amount of all of its debts to all creditors, which would simply force the business to close, and would result in the creditors being forced to accept whatever share of the business's assets a court chose to grant them.

Of course, the most glaring irony in all of this is that in the early 1950s, Germany itself, reeling under the weight of debt from two world wars and in the midst of trying to rebuild, asked for, AND RECEIVED, a forgiveness of approximately 50% of its massive debt (some of it owed to Greece). Indeed, that settlement was forced upon Greece and other countries by the U.S.

So you see, this isn't just "my theory," nor is it some novel concept. And history bears me out when I point out that a nation simply cannot be forced to repay debt to the point that its citizens are driven to being unable to feed, clothe and shelter themselves. No people will stand for it.