Greece's problems remind me a lot of the problems we're having in Illinois. The EU is trying to figure out what to do about the country: force austerity measures down their throats, bail them out, try to work out a palatable combination of the two, try to keep the the debt crisis from causing wider Euro inflation, try to keep the crisis from spreading to other iffy EU economies also in precarious deficit situations, like Spain, Italy, Portugal, etc., all while domestic politics inside Greece melt down under widespread strikes and disgruntlement. Clearly it's a different situation than what Illinois is facing. Greece and Illinois have a similar population size, but Greece has a GDP of $350 billion and a national debt 125% of its GDP, a deficit of something like 14% of GDP, whereas Illinois has a GDP nearly twice as high and a state debt of well under $100 billion. Obviously, because Illinois and the Federal government share and split various functions of government, Illinois doesn't have the same level of burden as a sovereign state would have to provide various services. Also it collects a relatively small percentage of its residents' income as tax revenue. Anyway, Greece and Illinois share a budget crisis long in the making but brought to a head by the private sector financial collapse and global recession. Because of the recession and high unemployment, Illinois tax revenues fell dramatically last year, just as federal tax revenues dropped heavily. The private sector crash brought on a public sector catastrophe in several states, deferred somewhat by a round of federal bailouts. Because the effect of the economic downturn on tax revenue lingers, the effect on states is magnified and may take a decade to sort out, maybe longer if the economic recovery is not robust and high unemployment persists for several years. To me the threat that the EU and the U.S. are both facing together in a certain extent is that the chain of cause and effects is likely going to be extended back into the private sector. Private sector downturn >>> U.S. state and EU member nation budget crisis >>> austerity measures and bailouts >>> more economic hardship and inflation >>> another private sector downturn. Bailing out Greece may not cause undo European-wide hardship, but the EU could beat itself senseless bailing out Spain and/or Portugal and/or Italy. Similarly, how many rounds of federal bailouts of how many states can the federal government afford, which is to say, to what extent do we want to transfer the trials and tribulations of Illinois taxpayers onto the backs of Federal taxpayers. To make a long story short, the Greek and Illinois crisis signal that the U.S. and European economies are likely going to slip back into recession by 2011 at the latest.