For most of the last 40 years, Greece has spent a little bit more money then they have earned. The people vote in politicians that give generous benefits, and give away money for jobs that don't produce enough of value to cover the salary. So every year, the country loses money, and the government has borrowed the difference.

Countries do this throughout history. Depending on who you talk with, even the United States might be doing this right now. And what usually happens is that the government nearly goes bankrupt, and resorts to printing a bunch of currency to pay for the debt. However, you can't just make more money by printing it: when you create more money, the money drops in value. So a country in serious debt could pay off their debt, but the people of the country would suffer: that German car that used to cost 30000 drachmas now costs 85000 drachmas, but people's wages didn't change much. Cost of living rises, sometimes out of control. And karma comes back to the country - after years of taking more then they produced, they have years of depression, sometimes with a decade or more to recover.

But Greece doesn't have it's own ability to print money anymore. They share the Euro currency with 16 other countries, and the other countries don't want to suffer along with Greece just because of Greece's greed. But if Greece defaults on their debt, it will cause banks to fail, causing further economic damage throughout Europe, possibly even losing the Euro as a currency. So countries must work together to bail out Greece, loaning their foolish friends money that they may not be able to pay back, just to prevent a crisis.

Yes, it's as bad as it seems. The problem is that the situation is worst in Greece, but it's also bad in Portugal, Spain, Italy, and Ireland, too. It's a smaller problem in Belgium. And bailing out those nations would create problems in the most important Euro nations, like France and Germany. And even those countries would have to cut benefits and work harder to pay for other country's poor planning. It would be a huge drop in the standard of living for hundreds of millions of people.

Think of this story the next time you vote for a leader that promises to give somebody "free ____" or that you have a right to something that costs money. The story of Greece is the story of the consequences of that kind of thinking.

In Greece, they cannot print their own money. They use the Euro which is used by a lot of European countries. Right now, many European countries does not want Greece to fail, so the stronger countries has to bail them out.

Greece actually has more debt than the United States when you look at the debt to GDP ratio. Percentage wise (compared to the size of the economy) Greece has more debt. The United States has more total, but less when comparing it to it's to GDP.

Overall, Greece is worse off than the United States. They can't help themselves as much and they are in a deeper hole.

They can't issue bonds because bonds is a kind of borrowing and will devalue the Euro, which is the currency of 17 European countries and European Central Bank has the right to print them. European Central Bank did allow Greece to issue bonds last year which were oversubscribed and gathered a lot of investor interest as Greece has to issue much higher interest rate to gather investor interest.

If European Central Bank allows Greece to Issue more bonds like US then it will devalue the currency Euro and other 16 countries will have to see its impact such as inflation, which the European Union would never want to happen, so the richer countries in European Union like France and Germany had to come forward and give Greece bailout which they had given several times. If ECB allows Greece to issue unlimited government bonds then it will create an imbalance in other 16 countries which are not directly responsible for Greece crisis, so giving bailout to Greece is only an option.

Greece has almost $366 billion of debt which is not as high as US' 13 trillion, but as the above member said correctly is more than its debt to GDP ratio in fact severely high in number compared to US. Unlike US which has every right to print its currency, Greece doesn't have because there are other countries which are stronger holding Euro as their currency and they would never want the value of their money to decrease leading to inflation.

Greece is in much worst condition than US, Greece is one of the most corrupt countries in Europe, people don't pay their taxes regularly and tourism is the backbone of economy and the protests in Greece against government has even led to declining the amount of foreign tourists who used to visit Greece making the situation even worse.

The government in the past had approved extremely good benefits for the people.
When the country has less income and more expenses, plus the impact of bad investments, the whole country is in trouble.
Once a country has given out many benefits, such as free education and free medical, it is very hard to reduce the benefits.

It's probably worse. Greece is just the latest country to blow up over outstanding sovereign debt issues. Long term policies and short term shifts are responsible for the Greek debt crisis.

In short, the Greeks have taken on too much debt, without showing enough productivity to pay for their expensive social programs. At the same time, the Greek population isn't entirely deserving of the blame.

Their leaders sold them down the river, in my opinion, by getting Greece into the European Union. They ditched a sounder currency in favor of the Euro, which is now crippling their economy. The EU also has the power to come in and enforce its own regulations on their economy, stifling growth.

Whatever happens, it doesn't look like it will be pretty. The Greeks seem set on either a radical political revolution, or being saddled with lots more debt. In the long run, Greece may become somewhat more isolated from the rest of the European community. For themselves and the outside world, this may not be a bad thing, as they try to repair their economy.