There Are 2% of Greeks Who Think Their Economy Is Doing Just Fine
NPR's Planet Money blog posted a graph today that helps put the debt crises around the world into context. NPR's Jacob Goldstein compared the 30-year interest rates of various countries and companies (plus U.S. homeowners) to illustrate how much the debt burdens of Spain and Greece have shaken investors' confidence in the countries. At 6.29 percent, Spain's interest rate is higher than those of Microsoft (4.83 percent), Wal-Mart (5.16 percent), Verizon (5.49 percent), and beer-giant Anheuser-Busch (5.5 percent). That means lenders feel safer give money to the maker of Budweiser than to Spain, the world's 12th largest economy. And investors have signaled their high level skittishness toward the Greek economy by offering an interest rate of 10.79 percent to it, roughly double the rates of any of the aforementioned corporations.
For now, Americans can take comfort in our stable, relatively low 4.25 percent interest rate. Goldstein writes that "Greece is what a real debt crisis looks like: Lenders get nervous about lending you money, so the interest on your debt starts going up. You have to spend more and more of your money paying interest, so your economy starts shrinking. That makes lenders even more nervous, and they demand even higher interest rates." Here's hoping the U.S. doesn't enter that cycle like Greece has.
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