From CNBC -- President Barack Obama on Tuesday urged European countries and bondholders to prevent a "disastrous" default by Greece and pledged U.S. support to help tackle the country's debt crisis.
"I'm confident that Germany's leadership, along with other key actors in Europe, will help us arrive at a path for Greece to return to growth, for this debt to become more manageable," Obama said.
I may be wrong about this, but I doubt seriously that a default by an economy as small as that of Greece would trigger a world-wide financial calamity as Obama would have us believe. I think Greece collapsing would be a cautionary tale about profligate government spending, vast unionization of the public sector, and the expectation by citizens of cradle-to-grave government care. A sobering collapse of California would do the same thing in the US. If California goes belly up, watch how fast other at-risk states get their houses in order, first by cancelling all public-sector union contracts and then by cutting drastically government spending. Essentially the states would have to tell Obama's union-obsessed labor relations board to go to hell, tout-suite!
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