An Brief Explanation Of Alstrynomics
A few years ago it was evident that America borrowed more money in the past ten years than we did since the founding of our nation. Much of the borrowing was done by the private sector in the form of mortgages, home equity loans, private equity loans, and corporate debt.
Further, it was that borrowed money that stimulated and drove our economy both privately and publicly with higher tax receipts.
Once the bankers started cutting back on lending to the private sector....it was clear that our system would collapse, absent addtional borrowing, as we had accumulated over $55 trillion of public and private debt that couldn't be serviced withoug borrowing more and more money.
In the past few years, the private sector in America has collapsed. Government has picked up the slack in borrowing.....and that which is functioning in the private sector is now dependent on government borrowing and spending to function.
NEVER IN AMERICAN HISTORY HAS OUR ECONOMY BEEN SO DEPENDENT ON FEDERAL SPENDING TO FUNCTION. The federal deficit alone is approaching nearly $2 tillion dollars handing out relatively large checks to tens of millions of non producing citizens.
Our consumption and "freedoms" as we know them is now dependent on a Federal government spending massive amounts of money against a shrinking private economy.
The problem comes in with other nations being forced to accept our currency as the reserve currency while there is less and less backing it.....our coastline is being covered in oil, our cities are falling into disrepair as factories shut down, our NON productive population is skyrocketing.
At some point, other nations will push back and not accept our paper in exchange for their production....especially since the bankers continue to cut off credit from our productive private sector. When that day happens, the freedom to consume as we know it will be over.......
Right now the primary force protecting our "freedoms" is over 700 military bases located in over 125 nations. But as our production continues to erode, more and more nations will be reluctant to accept our currency.
At that point, our government's options will be limited as most of our nation's population is directly or indirectly on government handing out money. Many of those people are producing nothing. And if that money can't buy much, our government will face a very angry population.
When the Federal government only bailed itself and a few select bankers out....you knew that private property rights in America were eroding....especially leaving a massive debt burden on cities, counties, states, schools, hospitals, private businesses and families that was impossible to service in a contracting credit environment.
It doesn't matter if you have lived within your means and saved. We all live in this huge condo association called the United States of America. And if enough in the association can't pay their fees/produce.....you will have to step up and pay/produce....everything you have if necessary.
We must produce a minimum amount for our nation to function....and now we are not producing enough money under the current system. So a new system will have to be formed....as our cities, counties and states become insolvent under the current one.
What that system is is anyone's guess...but based on current public apathy about the present situation....don't expect to have much input.
Welcome to the Digital Age.
Your fellow fool....