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RealityChek’s more discerning readers might recall that I spend a fair amount of time commenting on the quality of America’s growth and the makeup of its economy. The idea is that, although economic growth is economically good, all else equal, the way the economy grows is crucially important, and that it needs to result in a healthy balance between production and consumption. That lesson (should have been) brutally brought home for Americans by the financial crisis – which was preceded by several years of quasi-respectable but very low-quality growth. More specifically, that expansion was led by interlocking housing, borrowing, and personal spending booms, which lacked the underpinning of adequate output and income growth.

These days, the battered population of Greece is getting an even harsher tutorial on the imperatives of high quality growth and an “economy built to last.” But judging from the political tumult shaking the nation in recent days in particular, there’s little evidence that its population or leaders – or its creditors and the rest of the global economic policy – understands the message. 

The available economic data for Greece aren’t exactly the same as those I use to show the quality of America’s economic structure and growth, and they don’t cover all the bubble years, but they’re still awfully suggestive. In particular, they illustrate how during the global bubble decade, Greece’s economy and growth, too, were dominated by household spending, along with a lots of Big Government.

There’s no doubt that, viewed from 30,000 feet, Greece enjoyed banner years from 2000 to 2007. In inflation-adjusted its gross domestic product rose by 4.0, 3.7, 3.2, 6.6, 5.0, 0.9, 5.8, and 3.5% – much better than the performance of the rest of the Eurozone. Statistics from the Organization for Economic Cooperation and Development (OECD), however, indicate that throughout this period, Greece’s economy was incredibly household- and government spending-heavy.

According to the OECD, a grouping of high income countries, in 2006 and 2007 (the earliest available data years), household spending made up 56.33 percent and 54.99 percent of Greece’s gross domestic product. For those years, the averages for the Eurozone were 29.59 percent and 29.44 percent – a little over half of Greece’s levels. In 2006 and 2007, government spending comprised 17.87 percent and 16.66 percent of Greece’s economy. For the rest of the Eurozone, the figures were 13.97 percent and 14.04 percent. And whereas Greece’s corporate spending represented 25.8 percent and 28.4 percent of its GDP, the comparable Eurozone numbers were more than twice as great – 56.4 percent and 56.5 percent.

As numerous analysts have (correctly) noted, the United States isn’t Greece. Most important, Americans and their government can borrow in their own currency, and have substantial control over their financial fate. Yet even so, the U.S. economy has suffered painful and wrenching change since the financial crisis broke out roughly eight years ago, and the damage inflicted by that near-catastrophe is by no means completely fixed.

In other words, because the United States spent its first nearly 200 years generally managing its economy responsibly, it enjoys the wealth and creditworthiness that can long protect it from Greece-style tragedies. But even if a climactic Day of Reckoning never comes, America’s poor quality growth and subpar economic structure appears to have pushed it into a stretch of secular stagnation that should worry everyone.

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