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People frequently claim that if the US doesn’t watch out, it’s in danger of becoming Ireland or Greece.This is nonsense, since the US debt/monetary situation is nothing like Ireland or Greece’s. It controls and borrows in its own money. In that respect, it’s much more like Japan, which after years and years of people warning about its finances pays virtually nothing interest.
But there is a cautionary tale out there.
It’s not Ireland and it’s not Japan. It’s the UK.
The UK is similar to the US: Its manufacturing base has eroded, it’s too dependent on finance (arguably), and its government has sky-high debt. But it’s not going bankrupt. The market hasn’t lost confidence in the UK (in large part because it controls its own money).
It is facing a serious problem. In the wake of its austerity measures, UK consumer confidence is in freefall. Other economic indicators have been showing problems for the economy.
As politicians in DC continue to cut spending during the weak recovery, we have a pretty good, analogous model of what that’s going to look like.
Of course, for the doom mongers, this doesn’t suit their purposes, because they’re the ones advocating aggressive cutting, and this is what aggressive cutting looks like.
But if you want to look at another country and play the “Is the US the next ____” game, then the UK is a pretty good candidate.