Fools...Don't Make This Too Difficult
For 30 years, America has been borrowing more and more money after we became a credit dependent economy in 1980. For the thirty years prior, since 1950....our nominal total debt was relatively stable.
However, since 1980, total debt has increased from $5 trillion to $55 trillion dollars. Any nation can prosper if its citizens and government are allowed to borrow $50 trillion dollars....if structured and allocated properly.
The problem comes in around 2006 when the private economy started getting cut off from credit....that is when things imploded. Our private economy is in a massive depression evidenced by new housing sales down about 80% and tax receipts evaporating.
Making up the difference has been MASSIVE BORROWING BY GOVERNMENT AND WALL STREET.....just last year over $3 trillion dollars. You can live high on the hog when you are borrowing and spending trillions.....the problem is the private economy is not getting much of that money as much of it is simply being used to service debt and pay salaries of Wall Street and Government workers.
Eventually, the ability for Wall Street and Government to maintain the borrowing will come to an end as the system will not have the reserves to cover the interest obligations....and in the case of a nation as large as America, the world will not have the reserves.
Once we reach that point, America will be Zombulated and government will be left with few choices.....debase the currency effectively making our currency worthless or restructure the debt. If we debase our currency, as a credit dependent consumer economy....it will likely become practically impossible for most of the citizens and business to function. If we restructure, it will be painful, but we will set a durable foundation for growth.
The other path which governments sometimes take to bankrupt its nation is go to war......at least that way the citizens will be distracted as the government confiscates assets.
As an aside, if you don't think getting paid zero percent interest on your savings is confiscating your assets.......you are not thinking.
Now the only question is how long can we keep funding this multi trillion dollar Wall Street and Government deficit before the money runs out?????