It’s become cliche to compare the US debt situation to Ireland or Greece, and to warn that their fate is ours if we don’t something quickly.
But if you’re watching the situation unfold, you can’t still think there are any similarities.
Today in Ireland, leader Brian Cowen is warning that unless an austerity budget is soon passed, the country will literally run out of money in the coming months.
Get that? Ireland has a store of cash (basically) somewhere and it fluctuates up and down based on spending and the country’s ability to borrow.
The US doesn’t spend its money based on some pile of dollars stored somewhere. That pile doesn’t exist.
The US has a fundamentally different monetary system due to the fact that we have our own central bank and the global reserve currency.
That’s not to say the government won’t get into trouble somehow due to its spending, or that the reserve status of the US dollar is a permanent reality, but the debt situations are not comparable in the slightest.
California though? Yes, it’s like Ireland. It only has so much cash, and it can run out.