He says we are not out of the woods yet, however, that we need a “growth rate of between 5% and 6% to absorb 150,000,” jobs per month that need to be created for the growing American population and to begin “to absorb the unemployed.”
Greece in Crisis
Regarding the crisis in Greece, O’Neill noted that everyone is worried about he PIIGS–Portugal, Ireland, Italy, Greece and Spain, which “also borrowed beyond their capacity to service debt.” Contagion is but one issue; another is spreading the solution to the problem very far afield–saying that the “IMF intervention is about globalizing a solution to this problem,” and adding, “I do not believe the carpenters and plumbers in Chicago should have to help,” Greece get out of their crisis. He argues that there needs to be an orderly way for there to be a “bankruptcy for a nation,” as a way of “dealing with nations who have defaulted.” Otherwise the defaults will just continue to periodically pop up around the globe, according to O’Neill.
O’Neill also had comments on the situation closer to home, wishing we had politicians who were willing to tell the “truth” about some dire circumstances he sees ahead for the U.S. He cites the publicly stated “$10 or 11 trillion in U.S. government debt,” but says the liabilities are “$63 trillion if you account for Social Security, Medicare and Medicaid,”–and are not being counted in the regular “books” for the U.S, but rather in a “second set of books.” He says the “unfunded liabilities could result in the U.S. becoming like Greece.”