10/23/2012 12:53 am ET

Mitt Romney: U.S. 'Heading Towards Greece' With Obama

Republican presidential candidate Mitt Romney claimed during the debate that the U.S. is on track to face a debt crisis like Greece, even though the two countries face completely different circumstances.

"There are two very different paths the country can take. One is a path represented by the president, which, at the end of four years, would mean we’d have $20 trillion in debt, heading towards Greece. I’ll get us on track to a balanced budget," Romney said.

The U.S. does not have to worry about turning into Greece anytime soon, according to some economists. Unlike Greece, the U.S. has its own currency that the Federal Reserve can help weaken when necessary. Greece, in contrast, is chained to the euro, which remains overvalued as the European Central Bank refuses to consider higher inflation. Since the euro remains too expensive, Greece has found it difficult to compete with other countries exporting goods and services.

Severe austerity measures in Greece also have destroyed jobs. As a result, Greece is in a deep recession: Greek wages are plunging and Greek workers are losing their jobs. Meanwhile, creditors are demanding sky-high interest rates from Greece, as it relies on bailouts to avoid complete default.

The U.S., meanwhile, is continuing to borrow money at historically low interest rates because creditors view the U.S. as a safe bet. There aren't any major signs of a creditor revolt looming here.


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