We Are All Broke.....and about to find out.
In The Great Depression.....it was primarily the banks that were leveraged. Government, Business, and Families generally had little or no leverage.
Today, it is just the opposite.....Gvernment, Business, and Families are very leveraged and unlike The Great Depression when the banks held the paper, that paper has been distributed to our Pension Funds, Insurance Companies, Retirement Accounts, Community plus Regional Banks, and Mutual Funds.
Many of the "money center" banks have sold off much of their toxic nonsense to you or your retirement managers. The joke upon a joke is the only reason that this game has been allowed to go on so long is because the banks made even more money insuring that toxic junk with Credit Default Swaps permitting even more toxic debt to be sold throughout the system.
It got to the point where Wall Street never cared if the loan could ever be paid back because more money was made selling swaps than the principal balance on the loan. Your pension funds were being bribed with hundreds of millions of dollars to take the stuff.
The sad part was if you were a private business competing against a swap funded public business, they could operate at a loss forever even though you had better operations.... and you forced out of business because you couldn't produce at a loss indefinitely effectively destroying America's real economy.
At this point, M2, savings, is less than $10 billion dollars and total debt exceeds $50 Trillion. It is mathematically impossible to pay down debt with current savings.....and there is no technology in the world that can generate anything close to the requisite outside revenues to bridge the gap.
States have become so desperate to make debt payments that they are selling off state buildings providing only a very short term and short sighted solution. Taxes are being raised as well against a population with declining incomes and rising cost of living. Businesses are shutting down without notice when lines of credit are being cut off. Families....foreclosures and job losses tell the story very well.
The insane part is the faster we take our savings to pay down debt, the lower our capital base which will inhibit any future growth. Paying down debt in the current environment is mathematically impossible and the faster we try the slower our economy will get.
This is not a question...it is a mathematical certainty based on current Zombulation policies.
The interesting part will be when America finally wakes up one morning and learns practically its entire savings and retirement was simply levered upon leverage and much of the value as perceived was simply illusory....not much different than a Ponzi scheme.
And it is not just America...it is most of the World.
Remember.....when your government is broke.......you are broke too because they can essentially tax and take everything you have to maintain soverignty.....that is the law whether you like it or not.