Circling the Drain

We called it the “National Debt Death Spiral”. Well, hang onto your hats, because Greece’s version of this kind of man-made disaster is about to send that nation down the drain:

Drowning in red ink, Greece has nowhere to turn to revive the economic growth that might put its debt on a sustainable trajectory, reassure angry foreign creditors and offer hope to its recession-weary citizens.

Instead, the country finds itself in a vicious circle—a death spiral, some would say—in which it is borrowing ever more to keep up on its existing debts, crushing growth in the process and thereby worsening its all-important ratio of debt-to-gross domestic product.

Be sure to read our previous coverage of the topic to get a sense of how increasing debt crushes economic growth works!