I have been saying for at least a year that the U.S. economy was going to grow at only 1.5 to 2% this year (2011). Many other analysts, including the mighty Goldman Sachs, have been saying that growth would be substantially high–3% or more. Goldman just slashed their GDP forecast from 3% to 2% for 2011. Once again they have failed to recognize the obvious, which is that the U.S. economy is a lot closer to falling back into a recession than it is to a strong, sustainable recovery. Greece is the tip of the iceberg, and after they default, which they will sooner or later, we will see Portugal, then Ireland, and then probably Spain follow close behind. The IMF, which is largely funded by the U.S. is already deeply involved in the Greek bailout, and will have to pony-up a lot more cash as the crises intensifies. Greece is run by a Socialist government, and the people that put this government into power are not happy that they are turning off the free cash to citizens that they promised to get elected. The Greek situation is comparable to the mortgage mess we have experienced, with the government trying to force banks to offer “mortgage modifications” meaning letting borrowers extend the terms of their loans to reduce their monthly payments. All these programs did was to delay the inevitable, which is exactly what the Greek bailout is doing–delaying the inevitable default. Greece currently owes 350 billion Euros, which is 150% of its annual GDP. They will never, ever be able to pay this money back, period. They can’t even balance their budget. Even if they balance their budget, how are they ever going to pay-down 350 billion Euros? It is simply impossible. They will default and they will take other countries down with them. In all likelihood, they will dump the Euro and go back to the drachma so they can devalue the currency and thereby reduce the value of what they owe. Once they break away from the EU, this will cause a chain reaction of other countries in trouble also breaking away, reverting back to their home currencies, bringing to the end the EU and the Euro.