Just ask the Europeans who've been forced to bail out spendthrift Greece to protect their own economies. Just ask Americans who are suddenly seeing the Euro-scare drag down the U.S. stock market.
Wednesday's 2-plus percent hit on U.S. stocks was largely driven by growing anxiety that Greece's flirtation with catastrophe could spill over into Portugal, Spain, Ireland and perhaps Italy — all countries threatened by a general erosion of confidence. The ripples could hurt banks and investors around the world who have a financial stake in those countries.
Serious, sustained damage seems less likely now that other European countries — after much grumbling by the fiscally prudent Germans — have agreed to offer Greece $144 billion in undeserved credit. Disaster was staring everyone in the face. Greece's credit rating had been cut to junk status; its bonds were turning toxic, and it was within three weeks of default.
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The lesson for America, whose own national debt is rapidly increasing, is that government cannot run up the VISA bill forever. A binge of deficit spending is sometimes necessary in a dire crisis — World War II and the potentially catastrophic credit panic of late 2008 come to mind — but the binge can't become business as usual.
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