Ron Paul: U.S. should declare 'bankruptcy'

June 28, 2011: 12:55 PM ET

NEW YORK (CNNMoney) -- How should the United States deal with its growing debt problem? Ron Paul thinks declaring "bankruptcy" might be a good idea.

The Texas congressman and Republican presidential candidate was discussing Greece's fiscal trouble with Iowa radio host Jan Mickelson on Monday when he was asked, "If bankruptcy is the cure for Greece, is it also the cure for the United States?"

"Absolutely," Paul replied.

Of course, sovereign nations can't declare bankruptcy the same way a corporation might. Instead, the government would be unable to fulfill its obligations, and would stop making payments on its debt, resulting in a default.

Greece is currently embroiled in a debate over how to pare back its social programs and government spending to secure another bailout for paying its debts.

Paul said social programs -- medical care and other benefits -- have pushed Greece to the edge, and the United States should take note.

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