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GUY RAZ, host:

Tomorrow, the commission created by President Obama will vote on its plan to curb the rising national debt. Granted, the commission will only make recommendations, Congress doesn't have to accept them. But that vote comes as Europe struggles to contain its own deepening crisis.

Sovereign debt is now a big problem on the both sides of the Atlantic but in different ways. And we're joined now by Jacob Goldstein from NPR's Planet Money to look at those differences. Hi, Jacob.

JACOB GOLDSTEIN: Hi, Guy.

RAZ: How do Europe's debt problems compare with our own problems here in the U.S.?

GOLDSTEIN: Well, at the moment, Europe faces this big, immediate problem. It's getting very expensive for several European governments to borrow money. This is true, of course, for Greece and for Ireland - the countries that have already received bailouts. But it's also increasingly true for several others. It's true for Spain, Portugal, Italy, even for Belgium.

Now, the U.S., we don't have that problem. We can still borrow money pretty cheaply, and this is a very important difference. Because the U.S. can borrow money so cheaply, it's much easier for us to pay our deficits, at least in the short term.

Now, in Europe, countries have to spend more and more money just to make interest payments. So they wind up either having to cut other spending or they fall deeper and deeper into debt.

RAZ: But why is it that the U.S. can still borrow money, you know, relatively cheaply when Europe can't?

GOLDSTEIN: Well basically, investors are losing confidence that some of these financially weaker European countries will ultimately be able to pay off their debts. And there are different reasons for this.

You know, Greece got into trouble just because the government borrowed and spent too much money. The Irish government, on the other hand, they were doing okay until they tried to bail out their banks, and that wound up being a lot more expensive than everyone thought.

But despite these differences, you do see a sort of herd mentality among investors, where fear spreads from one country to another in Europe. At the same time now, investors around the world still see buying U.S. treasury bonds, which basically means lending money to the U.S. government, they still see that as one of the safest investments around.

So when people get worried about the global economy and whether this is the debt crisis now in Europe or even the big 2008 financial crisis, which of course was centered in the U.S., when worries like that arise, people still rush to lend money to the U.S. government. So it gets even cheaper for the U.S. to borrow money.

RAZ: Jacob, how does the debt compare between the U.S. and Europe? Is Europe worse off than we are or vice versa or what?

GOLDSTEIN: Well, when you step back from these sort of immediate issues and look at the bigger picture, you do start to see a lot more similarities between the U.S. and Europe.

One big example is that America's national debt is about the same size relative to our overall economy as Spain's debt is relative to its overall economy and about the same size as Portugal's debt is relative to its overall economy.

And then you look at the longer term, you see in both the U.S. and Europe this big demographic shift that's going to put a ton of pressure on government spending. Basically, there will be a lot more elderly people who qualify for government retirement benefits and government health care benefits, and there will be relatively fewer working people to support them.

So in Europe, we saw this recently starting to play out when we saw street protests in France, when the government raised the retirement age. And in the U.S., we're seeing it this week in the case of Medicare and Social Security, you know, both of which are big issues that President Obama's debt commission is trying to work out.

RAZ: So bottom line: They are screwed, but we're less screwed?

GOLDSTEIN: Slightly, slightly. We're all screwed. I mean, there's going to have to be really big shifts both in Europe and the U.S. Europe has this very acute problem, where the markets are forcing them to deal with it right now. The U.S., we don't have that acute problem, but we're definitely going to have to deal with it, as well.

RAZ: Thank you, Jacob.

GOLDSTEIN: Thanks, Guy.

RAZ: That's Jacob Goldstein from NPR's Planet Money team.

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