The United States is not Greece
"We're all poor, there's no doubt about that. But if you're going hungry here, the neighbor will give you a tomato from his garden, an egg from his hens. In Athens, people are packed in apartment blocks and they don't even know who lives next door," Ms. Papoutsi said.*
You may fear that the United States, with our escalating Federal debt and persistent deficits, is going Greek. This week's Periscope started out as a top ten list of reasons why the U.S. is not Greece, but all ten reasons come back to one big difference: we have the dollar.
Over the weekend, while the U.S. celebrated our independence from England, a large number of Greek citizens rejected proposed austerity measures. My opinion is that the solution is an exit from the Euro currency and reintroduction of the drachma. Will Greece be able to do this and still remain within the European Union? Will they remain within NATO (a major goal of the U.S.)?
Under the euro, Greece is beholden to the Germans and austere European countries. The Greeks are betting Europe wants to keep Greece as an ally (and in NATO) more than they want them to be solvent.
Markets around the world determine the value of currencies. Should the U.S. journey down a path that is fiscally more irresponsible relative to other countries, then the U.S. dollar would lose value relative to the world's currencies. The price for U.S.'s fiscal irresponsibility is purchasing power.
A country's sovereign currency is a key to a country's sovereignty. Greece could continue to promise pensions at age 55, if it was in charge of its currency. A drachma (and a dollar, for that matter) enable a government to be generous with health insurance and other social welfare programs. The currency will pay the price.