Will America be spared the same fate?

In the midst of a season that has provided riveting political theatre —
the budget extension impasse and the impending battle over raising the
debt ceiling — a bright ideological line has emerged between the two
major political parties. It is not about whether we must reduce our debt
(both sides ostensibly agree that we must), but about where those cuts
should come from. But let’s be clear: Without a serious challenge by
congressional Republicans, the seriousness of America’s debt situation
would not occupy its rightful place at the forefront of the political
debate.
 
Let’s face it. The U.S. government is bankrupt. Its liabilities exceed its revenues by over 200 percent by some estimates. If it were not for America’s status as a reserve currency — a status earned by the nation’s long history of political stability and economic growth — we would find ourselves in the same position as Greece and Portugal. Those countries are not only unable to repay the principal amount they’ve borrowed, but also have trouble meeting the minimum debt service payments without additional borrowing. In what appears to be an inexorable death spiral — borrowing costs rising, while revenues are falling — it appears those countries are going into default.
 
While the European Central bank has tried to bolster Europe’s failing economies with lending of last resort, it has thus far failed to stem the tide of economic logic: At a certain level, when you owe more than you make, your creditors get skittish and demand higher interest rates to compensate for the risk of default. Creditors in Europe fought their version of the Fed, and, contrary to popular wisdom in the U.S., they appear to be winning, putting the people of those countries at their mercy. In sum, the people of Greece and Portugal have become serfs in their own country. The land they live on and the houses they live in do not belong to them anymore. Their political system is being increasingly controlled — not by their elected leaders, but by unelected super-sovereigns such as the IMF and ECB.
 
Will America be spared from the same fate?

Armstrong Williams is on Sirius/XM Power 169, 7-8 p.m. and 4-5 a.m., Monday through Friday. Become a fan on Facebook at www.facebook.com/arightside, and follow him on Twitter at www.twitter.com/arightside.