A Conservative's View of the US as Greece

link here to article

Greg Mankiw is a conservative economist who, for a brief interval, was the head of Bush's Council of Economic Advisors. In this article he paints a picture of the US in which it looks pretty much like Greece looks today after years of poorly running its economy.
Investors will only invest in US debt at very high interest rates and interest payments become a very large part of the total budget.
The US, like Greece, will be forced to accept austerity as a fact of life. Taxes will have to be raised and government entitlement programs will have to be drastically cut or eliminated for many Americans. Just to amplify his message, the IMF is now located in China, which reflects its loss of economic power and influence.

Mankiw is correct about a couple of things. Our political system has failed us in several ways. It has been easier to win elections by providing tax cuts that are paid for with debt and not with cuts in spending. We have the lowest ratio of taxes to GDP of any OECD countries as a result. Most of this occurred under the Reagan and Bush Jr. administrations which he does not mention. We also have failed to deal with the rising cost of healthcare as he mentions. The Obama reform plan does have cost reduction aspects in it, but the GOP is doing what it can to neuter the plan. Mankiw only mentions the rising costs of new technology as the driver of healthcare costs. This is a factor but it is only one of many. Every industrial economy is using new technology as it becomes available, but most are able to provide universal coverage and excellent healthcare at half the per capita cost than the US. They have more efficient systems of delivering healthcare and containing provider price inflation.

Lastly, the US is not like Greece in many respects. It is not likely to encounter problems in the future that are anything like Greece faces. Presumably, Mankiw wrote this article to encourage us to thinks about changes that we need to make today in order to provide a better future for future generations. The message that he delivered appears to be more consistent with conservative efforts to frighten Americans about the future as a result of overspending by government.