The financial situation in Greece is dominating the news and that country looks to be heading over the cliff as it attempts to run from its mountain of debt.
The Greek people have only bad choices left. They can agree to strict Eurozone imposed austerity measures that would cut pensions, government payrolls and further harm their economy in order to stay in the Euro. Or they can tell the Europeans to stuff it and see pensions, payrolls, bank accounts and their economy obliterated in the aftermath of their exit from the Euro.
Pain is the only option. The only question is how much pain do they want and when do they want to take it?
At the same time, closer to home, Puerto Rico's Governor called for the U.S Territory to be able to file bankruptcy in order to restructure its debts. Its outside financial advisor said Puerto Rico is "insolvent" and will soon run out of cash.
How much debt are we talking about in Greece and Puerto Rico?
Greece has $360 billion in external debt. That works out to $47,636 per capita.
Puerto Rico has $167 billion in external debt. That is $47,828 per person.
How much debt does the United States have you might ask?
$18.5 trillion or $58,437 per capita.
All of this data from List of Countries by External Debt in Wikipedia.
How are we better off than Greece and Puerto Rico right now when our debt levels are even higher?
We have a much stronger and productive economy.
The dollar is the world's reserve currency.
And we can print money and they can't.
It makes all the difference in the world.
Until it can't be done any more.
Pay attention to what goes on in Greece and Puerto Rico.
It should be a cautionary tale for all of us.