Should We Be Worried About the Greek Crisis?

The Greek debt crisis seems to be winding its way toward an end, with the IMF scheduled to meet with Greek officials next week to discuss a $61 billion aid package. After many years of profligate government spending, Greece got itself to the point where its debt actually outweighed the value of its entire economy, and the sagging weight of all that debt threatened to bring the whole thing down. Although the debt crisis looked capable at one point of collapsing the euro and wreaking havoc throughout the entire European community, things appear to be headed toward a solution now.

Should we care? Does this crisis have ramifications for the American economy? Yes, in a couple of ways:

* If the value of the Euro falls, that makes it harder for Europeans to buy American products and take vacations here in the U.S. Or if the crisis causes the EEC to fall back into recession, that could hamper their ability to spend money on American goods.

* Many of the European governments have bought up a lot of debt from Greece, which is paying a healthy 7.3 percent on its ten-year bonds now. If Greece defaults on that debt, that too could have ripple effects throughout all of Europe's economies, and ultimately on our own.

* In the most dire of circumstances, there could be more worldwide skepticism of government's ability to pay back their debts. The U.S. is running massive deficits at the moment, too, and the Greek crisis could push investors away from buying government debt.

So while there isn't likely to be any direct effect, the global economy is still precarious enough that any major fiscal problem in a developed nation is worth keeping an eye on.