The Rise and Fall of the Greek Empire
By Pat Racimora on April 29, 2010 at 8:00 PM in Current Affairs

Only one place remains on my “Bucket List,” and that is to visit Greece.
No ancient history, no parade of amazing thinkers, have held such fascination for me. So it is with considerable sorrow that I created this image. This week Greece’s credit rating has been downgraded to junk status. And, what does this mean for us?
Along with Greece, Portugal and Spain are fading, raising concerns that the debt crisis in Europe could soar to calamitous heights. Here’s a quick recap from Jack Ewing of the New York Times.
The ratings agency, Standard & Poor’s, downgraded Greece’s long-term and short-term debt to non-investment status and cautioned that investors who bought Greek bonds faced dwindling odds of getting their money back if Greece defaulted or went through a debt restructuring. The move came shortly after S.&P. reduced Portugal’s credit rating and warned that more downgrades were possible.
The downgrades, announced near the end of trading in Europe, came amid rising political tensions across the Continent that had already punished Greek bonds and sent stock prices down sharply from London to Paris to New York. Investors, worried about shock waves in the broader European economy, migrated away from the euro and pushed the dollar and Treasury bonds higher. The euro slid to $1.3316 in afternoon trading in New York from $1.3382 late Tuesday.
“This is a signal to the markets that the situation is deteriorating rapidly, and it’s not clear who’s in a position to stop the Greeks from going into a default situation,” said Edward Yardeni, president of Yardeni Research. “That creates a spillover effect into Portugal and Spain and raises the whole sovereign debt issue.”
S.&P. forecast that Greece’s debt problems would only get worse, rising to 131 percent of GDP in 2011, the agency said. At the same time, growth would be nearly flat until 2016, meaning that the government could not count on expansion to lift tax receipts.
Of course, we have to ask, “What about us here in the USA?”
It’s a valid question with no solid answers forthcoming. Our debt to foreign countries is also overwhelming. And although I keep hearing that the economy is improving, I don’t see jobs and homes being saved. Fingers get pointed in every direction, but I don’t see leaders stepping up to the plate in ways that will result in serious fixes. You and I are part of the problem as well, and we will have to figure out how to take more care in how we live and how we vote. Increasing numbers of economists are warning that our kids will be growing up in a downgraded country, with China and India (and maybe others) surpassing us.
Greece is both a sad and a cautionary tale. Fasten your seat belts and drive as safely as you can.


















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