It is now becoming clear that the world is headed into another financial crisis.  There is now a growing list of countries facing serious problems and potential insolvency.   Some nations such as France are now being added to the list; however among the worst is the United States.   There has been much conversation that the United States is becoming Greece and in fact it is well on the road to passing that country as the most profligate and most dangerous to the global economy.

In a recent American Thinker article by Steve McCann, a national insolvency index was promulgated which reveals those countries facing the worst crises and why.  In essence the index is a combination of the annual budget deficit as a percent of Gross Domestic Product and the current unemployment rate. 

From the article:

The accelerated level of deficit spending, except in times of a major war (such as World War II), is indicative of a lack of fiscal discipline and tax revenues sufficient to finance those expenditures.  These revenues can only come about from a growing economy and near full employment.  When high deficits are coupled with a dramatic increase in unemployment for more than two or three years in a row, that country has embarked on a dangerous road that will lead to insolvency if not addressed quickly.

If a nation wishes to maintain its solvency and continue to expand its economy, it should not experience deficits higher than 3% of its GDP and, in today's quasi-welfare societies, unemployment rate above 6 to 7%.  On an aggregate basis a combination of these factors should always remain below 10.  The higher the index above 10, the greater the problems that country is experiencing and viable solutions to solve these dilemmas will be increasingly difficult to enact.

A comparative chart is as follows:

All the above countries are facing serious problems.  France and the United States have been able to mask the depth of their predicaments by the sheer size of their economies and in the case of the US by their ability to print vast sums of money.

As noted in the American Thinker article, the course Obama has set for the United States continues this high insolvency index as the 2012 index will be 18.0 and based on projected budget deficits and unemployment the index will not fall below 10 for the following six years.

By comparison from 1947 through 2008 the average index for the U.S. was 6.9.  The highest single year was 1983 at 15.5.   In those intervening 61 years the index was above 12.2 only three times.  The index during the George W. Bush years averaged 7.4 while under Barack Obama it will be 19.1.

Unless drastic changes are made, America will not only become the next Greece it will become the most massive economic and financial failure in the history of mankind.  It is time Americans and their leadership begins to understand the true depth of the nation's problems and not sit back and chuckle at the ongoing crises in various European countries, the United States is in the same predicament if not worse.