@Chris Haas
The U.S. is different for many reasons, but the simplest is that our debt as a % of GDP is substantially smaller. Depending on who's measuring, Greece's is around 180% to 185% where ours is around 75%.
When you're talking about private pension plans, I agree. Most companies do not fund their pensions in a very proactive manner, which all too often leads to lots of sour grapes for employees that put in long careers with the promise of retirement income. That issue directly led to our current reliance on IRAs today, which doesn't really solve the issue at all, just causes us to expect less. Public pension plans, the biggest of which is Social Security, haven't been managed as well as many would like, but are not really broken. Small tweaks to the formulas to reflect the fact we continue to be in better health, work longer, and live longer should sustain the program for the next generation without much difficulty. The current issues regarding passing legislation over the last decade make those changes seem daunting, but they really would be pretty minor.
Back to Greece, there is much more going on than a simple breakdown of a benefits heavy system. The US is reasonably good collecting the taxes its supposed to to fund its benefits, Greece is not, and that is not an easy fix. Neither is the current heavy reliance on "black/grey market" businesses due to the crushing bureaucracy that make business starts/growth through legal channels uncompetitive/impossible. Those systemic changes are part of what the EU really wants to see completed to clean up the economy and let it breath and grow a bit.
Unfortunately, those pretty agreeable ideas are almost certainly not enough to remove the huge burden of debt on a country, even one that has a lot of ground to gain in those areas. The sovereign debt of Greece has grown over 20% as a %of GDP in the last 3 years largely due to the fact that their GDP has fallen, which makes the debt load look even more daunting. That reduction is likely caused by the fairly regressive tax policies and benefits reductions begun as part of the "austerity" provisions of the original bailout. It is all fine, well and good to require intelligent spending, but something many people forget is that, unlike a large company, a country is often the primary driver of its own growth. If Target decides to lay off 10% of its workforce, that doesn't remove a substantial portion of customers from its stores and is a pretty direct boon to its bottom line. If a country decides to reduce its benefits spending by 10% (or in Greece's case, substantially more), that pulls pretty much the entire amount out of the economy of the country, and where are tax revenues generated? The economy of the country. Again, that's not to say that profligate spending is a good idea, but one should always be cognizant that the opposite is just as bad, if not worse, when you have a high debt load. You need a happy medium if you're to encourage growth.
There are plenty of precedents for this kind of imposed austerity not working well for a country. Much of Africa was heavily indebted in the 1980s and 1990s which led to IMF and World Bank imposed austerity measures, which placed multiple countries in chaotic downward spirals, both economically and politically. When major debt relief began in the 1990s, it did a lot to rescue countries that were almost certainly destined to fail otherwise. While Greece has already gotten a haircut on its debt, it is still at an unsustainably high level (partially due to the fall in GDP), even if moderate growth is achieved over the next decade. The IMF is the main voice to this, outside of the Greek government.
The conservative bloc of the Eurozone countries, led by Germany, seem to have a punitive view towards Greece, beyond what is needed to fix the current debt issue. Greece obviously hasn't been a particularly willing dancing partner over the last 5 years, but they seem to be the bunch that the conservative bloc wants to make an example of. Countries like Ireland, Portugal and Spain were reasonably mute in taking their austerity lumps, and are scraping along but surviving. What ideas would they get if Greece, the most indebted of any of the problem countries, is able to work a more favorable deal to deal with its debt? Germany and its bloc seem very focused on preventing that precedent.
Leaving the Eurozone if a debt writedown isn't forthcoming seems to be Greece's best option, as it restores the biggest tool in the economic arsenal to their control: currency valuation. The Euro is, and will remain, a relatively strong currency in the world, as its driven by a number of the leading world economies. That is a large and direct impediment to using exports to drive the kind of growth numbers that Greece would need to make substantial progress. If you look at the US, it has long been an issue for American manufacturers in staying competitive on the world stage when the Dollar is strong, and a constant thorn that the Chinese (allegedly) keep the Yuan artificially low. Greece's current government doesn't seem like the autocratic wizards that it would take to make a currency switch back to the Drachma a less chaotic one, but it is definitely the only option to really retain autonomy and perhaps grow their way out of the worst of the problem, not to mention print currency to pay back a portion of their debts.
Long story short, the Greek debt crisis is about a lot more than Greece spending too much and not taxing enough :-). I don't see the current deal as it stands as one that will prevent this discussion from coming up again in a year or two, and will perhaps not even fly this time with the renewed push this week from the IMF for a debt writedown.
