By Bill Broich
How in the world did so many countries end up borrowing so much money. When I think of the American National Debt it seems to be so stifling that it becomes difficult to even understand the enormity of it.
But….Our debt is and has always been in a direct relationship to our Gross Domestic Product (GDP). As long as those ratios are in balance, the National Debt has always worked for the American Economy.
The same is not true for Spain, Greece, Italy and Ireland. Their GDP ratios are not in balance and the amount of debt compared to their ability to tax their populace is completely out of balance.
Should the US stand by and let Europe solve their own problems? It would be easy to say yes and keep out. But unfortunately, we are a global economy and Europe is easily our largest trading partner. The better question is what to do?
The European Union has come to the aid of Ireland (bank loans) and will prop up Greece to the tune of $150 Billion dollars, dollars that probably will never be repaid. On the surface that seems like a bad deal but there is a long history of such behavior, when the US was involved in it it was called Lend Lease and we went and forgave (over 2 Trillion in today’s dollars) to Europe to fight the war (WWII) and to rebuild afterwards. Those dollars were forgiven and were considered and investment in American and World Trade.
Should we be more involved in Europe and their financial woes, I am afraid we have always been and we will do much more in the future.