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Does This Chart Show America Is Going Down the Path of Europe?

The chart below is one of the Atlantic’s “Most Important Charts of the Year.”

But what makes this chart important?

According to the source of the chart, Emily Goff, a research assistant at the Thomas A. Roe Institute for Economic Policy Studies, it’s that it shows the U.S. is headed toward the fate of Greece, Italy and Spain.

"Greece, Italy, Spain and other countries are suffering from a financial and economic crisis – fueled by unmanageable debt and monetary policy failure – that will surely affect the U.S. economy. As this graph shows, debt held by the public in the U.S. totals about 70 percent of the economy. For the U.S. to avoid going down the same path as Europe, Washington must curb federal spending," Goff says.

But has Goff read her entire chart? Way over on the right side, beyond Greece, is Japan. Now, Japan has suffered from a slow-to-no growth economy for a long, long time. It’s hardly an ideal outcome.

But it hasn’t suffered the financial and economic crisis fueled by unmanageable debt that Europe’s periphery is going through. It has been able to accumulate a stunning mountain of debt without a debt crisis.

The main question to ask is whether the U.S. debt is closer to that of European countries, which do not control their own currency, or Japan, which does. The answer, obviously, is Japan.

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