Debt in one country does not necessarily compare to debt of another state, according to a Standard and Poor’s report.

Even though California has faced budget deficits in consecutive years, the amount of state government spending only accounts for 7% of the state’s total economy. In Greece, this number is closer to 50%. Even if they factor in county, city, and special district spending, the government’s share of the economy is only 32%.

According to the risk agency, California’s problem is one of policy. A policy crisis doesn’t have the same immediate, disastrous consequences as a debt crisis. Because the state makes gradual payments on debt, it is less onerous on state coffers than the less frequent, balloon payments that Greece makes.

But the size, diversity, and resiliency of California’s economy may be its saving grace. With so many different aspects driving industry in California, the state remains a safer risk than Greece.

From the Associated Press:

California and Greece might share enviable weather and postcard-worthy beaches, but their fiscal problems aren’t the same, according to a Standard & Poor’s report released Tuesday.

In the aftermath of the global financial crisis, commentators, bloggers and financial figures started drawing parallels between the debt-plagued country and the most populous state in the U.S.

JP Morgan Chase chief executive Jamie Dimon, for example, told shareholders in early 2010 that California was a bigger risk than Greece because a state default could trigger defaults by smaller states.

Read the full article here.