US Action News

“Europe is a slow motion train wreck and there’s a “significant risk of a Eurozone breakup.” This doesn’t mean Greece and Portugal leaving, it means Spain and Italy ultimately leaving as well, which would mean the whole thing is toast.” – Business Insider

Dow slumped 297.05 points, or 2.48 percent on news that the Greek bailout plan to save the Euro might fall apart.

Italy and Spain will remain under pressure. Nobody has the money to save them or to recapitalize the banks again when the big deficit countries lose access to the market and fail.

The painful part of austerity hasn’t even hit yet, nobody in Europe has any idea what’s going on, and social strife, if it seems bad now, will become a daily issue.

If the “super committee”, the bipartisan congressional committee formed to address the U.S. deficit, fails to agree on a plan by November 23, $1.2 trillion in automatic spending cuts, mostly in discretionary spending will be triggered, beginning in 2013, which would negatively impact the already fragile U.S. economy, says Merrill. The bank also cut its 2012 and 2013 U.S. GDP forecast to 1.8% to 1.4% respectively.

The problem of the EU and the euro “is the loss of an independent monetary policy” because what works for Germany does not necessarily work for France, Spain, Italy, and the other EU members.

“The question is not whether or if there is going to be a double dip, but whether it’s going to be mild or severe with another financial crisis,” Roubini told CNBC

“Stop printing money. Start living within your means.” – “It is calamitous here.” – “The world is going to turn into a very much colder and darker place if the United States and Western Europe are no longer the dominant powers.” Hannan is also the Secretary General of the AECR an alliance of conservative political parties in Europe.

At $14.9 trillion, our total public debt is also bigger than our economy, putting us on a par with Europe. Yet our government seems in no hurry to reform our own welfare and entitlement state.

It is rather ironic that Barack Obama, who has probably done more damage to the American economy that any president in modern US history, is now lecturing European leaders on their financial problems as well.