BY KATIE KAZDA, Guest Columnist
A seminar on Thursday night informed University of Michigan-Dearborn students about why the Greek debt crisis is happening, and how it will affect us in the United States.
There are many things that played a role in the debt crisis.
Dr. Bir Miteza, Professor of Economics, said “reliance on foreign lending, to fund private or government deficits” is part of what caused the debt crisis.
“A lot of lenders lent money to countries that couldn’t pay back the money,” said Miteza.
According to David Sobiechowski, Lecturer in Economics says high interest rates keep feeding on itself.
“Most Greeks willingly give false tax statements and buy things without or reduced value added tax,” said Ioannis Kamarinas, a Greek citizen and University of Michigan grad student.
“The people are totally frustrated with the government’s efforts to deal with the crisis,” said Kamarinas.
Debt won’t be easily fixed overnight.
“I see worse days ahead,” said Mieteza.
The men offered a few solutions to the debt crisis. Miteza suggests to clean up debt, return to sustainable growth, and adjustments that include removing barriers to growth, and to become competitive.
According to Sobiechowski, the European Central Bank should buy the debt and that should solve the problem of the downward spiral.
“Most U.S. banks aren’t directly exposed to the European banks, but they are indirectly connected to the private sectors,” said Sobiechowski.
This could affect the United States, but there is no need to start worrying yet.