Jacques Melitz considers the comparison:
In June 2009, the state of California handed employees IOU’s, so-called vouchers, for payment. The incident has not been recognized as a default only because banks have honoured the vouchers thus far; but costlier and incontestable default still lies ahead as a significant probability.
This is reflected in the spreads on the credit default swaps on state bonds and the credit ratings of the bonds. The Californian economy is four times larger relative to the US than the Greek one is relative to the Eurozone. Yet nothing remotely resembling the concern and turmoil in Europe about Greece has occurred in the US regarding California.
Neither California’s recent or prospective future breaches of contract have caused a ripple in the US financial sector, not even the part of it heavily implanted in California. Upon examination, it is difficult to explain this difference without invoking the self-inflicted damage of the doctrine that any default would be anathema for Eurozone.
Melitz suggests that the European Union and the European Central Bank need to change the ways in which they define themselves to make the currency and the union more robust against financial problems in relatively small sub-units like Greece.