Lv 4
RMP asked in Politics & GovernmentGovernment · 1 decade ago

How long before the US economy collapses?

With huge amounts of money being spent and an economy that is becoming increasingly unsustainable is the US going to go the way of the USSR?

This is a question not a statement, so you will only rant at me if you are extremely insecure about America's future.

12 Answers

  • 1 decade ago
    Best Answer

    Here's a possible scenario:

    To fund trillions of dollars in expenditures, Congress issues a wave of T-bills, increasing the interest rate in the process. The market for loanable funds stalls out, freezing the housing market and slowing business growth, which prolongs the recession.

    Due to increased political pressure, the Fed starts printing money to ease upward pressure on the interest rate, and to finance Congressional spending projects. As inflation begins to surge over the following year, foreign countries start dumping dollars and holding their reserves in other currencies. Inflation will grow even further and U.S. exports will experience a brief boom period as foreign countries exchange unwanted dollars for real goods.

    At home, rising concerns with inflation will cause households to save less money, stocking up on food and other real goods. This will further affect the market for loanable funds, and up to 80% of existing credit lines dry up within the year.

    At this point, the Congressional Budget Office will be in a crisis and the government will have to weigh different options to seize as much money as they can from the populace. They will pass a mixture of income taxes, especially luxury taxes, gas taxes, and consider devaluing the dollar to stabilize inflation and liquidate the burgeoning public debt. You will see an increasing number of expats to Canada, Mexico, and Central American countries. Anti-government groups will grow in numbers, with the possible element of domestic terrorism increasing in frequency.

    Not a happy picture. It's just one scenario. I will say that I am extremely concerned by the growing burden of public debt--I don't know where this is going to go.

    One possible bright spot on the horizon is that with the coming insolvency of Medicare and Social Security, growing numbers of disillusioned baby boomers could leave the Republican Party for an independent caucus. You might see a large group of talented, elderly individuals shaking up the political process and making real progress on many seemingly incurable problems. And when I say progress I don't mean the Marxist kind.

  • 4 years ago

    How much debt does America have to have before it can claim to have a collapsed economy? Last time I heard the debt was already off the scale. America is still considered the richest country in the world, but those riches are owned by less than 10% of the population, hence the unease of the rest who continue to blame Obama for the mess, when in effect Bush was responsible. Obama has only been in power 17 - 18 months and that would never be long enough to wreck the worlds largest economy. Bush had 8 years and started 2 un-winnable wars and spent trillions on them. Apart from the Health scheme, which has not yet got under way, Obama has spent a fraction of what Bush spent in Iraq alone, chasing Saddam, and all for his own ego. America is becoming a melting pot and the seething anger is going to end in tragedy if something isn't done soon to quell the unease.

  • Anonymous
    1 decade ago

    In reality, it already has!! The unemployment rate creeps higher and higher every day! Just think, 10% of the WORKING population without jobs, and the other 90% - half of which aren't old enough to hold a job yet. Then you have the illegals actually MAKING money under the table and not paying taxes - I don't know that percentage! And what's left who are lucky enough to hold a job, are being taxed back into poverty, paying for the guys who don't have a job!! It's a loose loose situation. Nobody wins. So how is all the money the Government supposedly is giving these entities helping to put us back on track? Aren't they supposed to pay that money back? HOW! Voting him back into office the second time around!? That's a high price for us to pay for something we don't want!

  • 1 decade ago

    To be honest with the questioner and Americans in particular;The United States is no longer the world financial powerhouse it used to be.

    Gone are the days of John Wayne,Robert Mitchum.Robert Ryan and Betty Grable all of that has long gone.

    America is now embarking on a new part of its evolution;Whether Americans accept this or not.China and India are the new leaders in the worlds financial pecking order.

    The next 20years will see a new upheaval in the new world financial rankings as America takes 3rd place!

    One point that was missed in the American media circus recently;

    President Obama's visit to Russia was not just about nuclear arms reduction,But about a loan of trillions of Russian roubles to America.

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  • 5 years ago

    I'm slowly stocking up in food and goods so that when it does collapse, my family will be prepared. It seems to be soon if anyone is actually paying attention to whats going on. Soon a roll of toliet paper will be worth more than a dollar

  • Anonymous
    1 decade ago

    More like a death of a thousand cuts. We are having troubles as we are heavily overtaxed and continue to run a deficit. Current govt response - more taxes and more spending and what the heck - lets add some real business killers like a cap and trade and "health care reform".

    But its our fault - we elect people that promise everything and tax our grandchildren.

    How about some self responsibility ?

  • VC
    Lv 4
    1 decade ago

    There will be a bailout bubble soon enough...

    The worst is yet to come in my opinion. I would say 6 months to 2 years.

    Riots will start when the currency is debased and unemployment hits 15%.

  • Anonymous
    1 decade ago

    Only if we can stumble along until we can clean

    up congress, we may have a chance to survive,

    however the rest of this year and all of next year,

    I see no light at the end of the tunnel and we

    will be stretching our blanket pretty thin by then!

  • Anonymous
    1 decade ago

    In theory it collapsed last year. It's only because it's the world's largest economy that people still have sufficient confidence in it for it to limp along.

  • 1 decade ago

    Its a matter of months away, and when it does, everything will come to a halt, everything that relies on the perpetual flow of money to function will stop. Your electricity, heating, food, healthcare, education, transport and so on will all cease. Stock up on tinned food, water and ways to keep you warm.

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