But really, how likely is a Greek euro exit?
The conservative Economist magazine reports it this way:
"If Greece rejects the second bail-out or falls drastically behind in its program of debt payments and public sector cuts, its exit would become inevitable." (Paul Krugman and his colleagues agree.)
This scenario appears increasingly likely as Greek voters tire of supporting politicians who continue to attack the majority of voters' living standards through massive austerity policies that cut back jobs, social programs and the public sector in general.
Why would the US be affected so badly by a European Union economic meltdown?
The Bank for International Settlements reports that US banks have loaned $97 billion to the weakest European nations in the public and private sector -- with an additional $276 billion loaned to German and French banks, which would suffer greatly if their weaker-brother nations drowned.
Furthermore, the European Union is the US's largest trading partner; this means that US exports to the EU would instantly be cut back, thereby dealing a heavy blow to the US economy.
Plus automatic cuts to federal spending of $100 billion every year until 2021
The giant austerity measures driving Europe to the edge of revolution have been delayed on the federal level in the US until after the November elections. But then the seldom discussed budget "sequesters" will kick in -- automatic cuts to federal spending of $100 billion, every year until 2021.
Also, after the election, federally-enhanced unemployment insurance expires, as does the federal payroll tax cut. Compounding these problems, Obama's stimulus plan, which had been supporting states and city governments, petered out at the end of 2011, thereby already having added ongoing pain to the continuing deficit crunch nationwide.
So it's quite possible that the US may already be re-entering an "official" recession -- though the jobs recession never left: the April jobs report showed that only 64% of adults in the US are either employed or actively looking for work -- the lowest percentage in more than three decades.
Meanwhile the US Congress is still locked into an insane and completely discredited policy
Democrats and Republicans alike remain united in their insane strategy of combatting the weakening economy by resorting to the already disproven European strategy of austerity. Both Dems & Repugs have already worked together to cut 600,000 government jobs (mostly local) since 2009, thereby debilitating the valuable & often essential services these workers provided. (Tragically, education has been targeted most of all, thereby increasing the likelihood that this recession could conceivably become permanent!) Also missing is the spending power that these workers once had, which provided jobs for thousands of others.
Even worse, these job-loss numbers will balloon when the effects of Europe's plight reaches America's shores. Therefore, working people in the US need to adopt an increasingly popular slogan that rejects austerity measures: namely, Tax the Rich! In other words, make the rich pay for the crisis so many of them created. This means that instead of massive job reductions, cuts to education and health care, . .
* taxes on the wealthy and corporations should be raised;
* the banks should (at least temporarily) be put under public control rather than being bailed out with public money;
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