Is Greece showing us our future? Euro-zone countries Portugal, Italy, Ireland, Spain, and mainly Greece, all appear to be in over their heads with exploding deficits. They basically have more debt than they can service and are in a serious threat of defaulting on that debt. A default of this magnitude definitely affects the United States markets. The good and the bad of the global market place is that we are all tied together. A large default would have ripple effects.

The problem is three fold – First, these governments cannot find buyers for their government bonds. In other words, no one, for obvious reasons, wants to lend them money. Second, even if they were to borrow money it would only be used to make the debt service payments that they are having trouble making today. Finally, and this is the biggest of all concerns, there is no one at the bail-out window to help these countries out. As a global economy, we are all bailed-out. This could very well be the kick-off of round two of the debt crisis.

Are we watching the future of America? After all, we are the biggest debtor country in the world and credit rating agency Moody’s is concerned about our credit rating as a country.

Moody’s said this week that the United States, along with 16 other countries, could lose their Triple-A credit rating if fiscal deficits and heavy debts are not effectively managed.

Which that just raises a few questions for me. First, why do we still have a Triple-A credit rating in the first place? Second, it is only a matter of time as the politicians are showing every day that they are not effectively managing our debt.

This is the problem with a debt crisis. As history will confirm, the only way to solve a debt problem is to pay back the debt or someone loses through default. Printing more money doesn’t fix it. It just adds to it. We should be taking a look at what is happening in Greece and recognize that this is our future unless we drastically make some changes.

Tags: Bob Brooks, debt crisis, Greece, Moody's