The big deal with the Greeks is they have borrowed large sums from the banks in Europe. If the Greeks default it will result in substantial write-offs at these banks, which will erode their capital base and cause some of the larger institutions to fail. This happened in the United States, to a much lesser extent, and a number of U.S. banks failed, however most of the depositors were covered by the FDIC which is backed by the U.S. Government. In Europe there does not appear to be sufficient resources to take care of this problem. Hence there could be a massive failure in the European financial community with a Greek default.
The United States crises began with the government promoting the idea that everyone should own a home and urged the banks and other lenders to make loans to people that were not credit worthy. At the same time the government backed entities, FHA, Freddie Mac and Fannie Mae who purchased these loans from the banks which provided the banks more capital to continue the process, until wholesale defaults caused the whole process to crash with people losing their homes and jobs with massive losses in the financial community. Since 2008 the US Government has advanced $140 billion dollars to cover these losses and there probably will be another $72 billion dollars advanced before this process is over. This could happen in Europe on a much grander scale.
The result here is massive unrest in this country evidenced by the Tea Party and the Occupy Wall Street and other groups. There is a feeling of an erosion of liberty and an erosion of prosperity in the United States today. The Tea Party demonstrates in a civilized manner while the Occupy Wall Street group has run amok destroying public and private property as did the Union protesters recently in Wisconsin.
We have a crisis of leadership in this country. There seems to be no Jack Kennedy or Ronald Regan to lead us out of this. There must be someone in this vast and great country of ours that is capable and willing to assume this very important task of leadership to lead this country forward again.
K.C. Cleveland