Is the US Economy Really on the Road to Bankruptcy? Cornwall Ontario – August 12, 2010

Cornwall ON – So is the US Economy bankrupt?  I know that sounds nuts, but is the largest economy in the world beyond saving?   With a depression going on; massive unemployment with little hope for thousands of workers, inflation in many key areas, and record deficit spending how does the US pull out of its spiral?

Many States aren’t doing much better, and you have cities like Detroit razing miles of buildings and turning them into inner city greenfields as cities try to cope with the cost of maintaining themselves.

So what happens eventually?   Will China and other countries keep buying up US debt?  If the US went bankrupt what happens to them?

Laurence Kotlikoff has quite the take in a Bloomberg story below.

LINK

The first possibility is massive benefit cuts visited on the baby boomers in retirement. The second is astronomical tax increases that leave the young with little incentive to work and save. And the third is the government simply printing vast quantities of money to cover its bills.

Worse Than Greece

Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices.

Now that’s scary.   It’s also already happening and many people don’t realize it yet.   A local economist recently shared with me that the amount of people it takes to pay for one Nurse’s retirement (not picking on nurses either) has jumped up over the last 20 years dramatically and that at the rate its going there won’t be enough Nurses contributing to their pension fund to pay for their retirees.

It’s funny living on the border and travelling fairly often that you can actually see small changes happening.   Just go through a grocery store across the border or talk to people and it’s there.

Greece impacted the world; what happens when bigger countries follow?

You can post your comments below.

11 Responses to "Is the US Economy Really on the Road to Bankruptcy? Cornwall Ontario – August 12, 2010"

  1. glassbowl   August 12, 2010 at 6:44 AM

    The US is so bloody screwed. No China will not buy US debt forever, the Federal Reserve is printing money like crazy. If the US goes bankrupt then they will have to live within their means. They will have to definitely reduce the size of the military, Wall St will not control Washington and China will be the big player. The same thing happened to the British Empire about a century ago. They got big, they got stupid, they got knocked back to reality.

  2. winno   August 12, 2010 at 7:24 AM

    What I believe is , paradise will bust if devils come and they will ruin it.
    I don’t think china is angel. They actually took the best thing out of US.
    Now the richest people in china moved their money out and wait for the best news from china.
    The open and free economy cannot sustain without proper protection will finally go bankrupt facing the cunning devils from communist countries like russia and china. They won’t understand the good of democratic society. But they take every advantages instead.

  3. glassbowl   August 12, 2010 at 9:26 AM

    Winno, it wasn’t the ‘commies’. It was the US who did it to themselves. Back when the dot com bubble burst instead of the US taking the pain of recession they dropped interest rates down to amost nothing. So instead of the economy correcting itself you had dumbass banks giving loans to people without jobs or assets. Then it really started going down hill. Right now they trying to fight debt with more debt. Nothing good is going to come of this. The only problem with China was they were foolish enough to lend the US the money.

  4. Tammy A. Hart says:   August 13, 2010 at 8:00 AM

    The whole global economy is in a mess, which means ours will never get much better.
    Federally and Provincially we still spend like drunken sailors. Whats it going to take??
    I claim its the socialist thinkers that are making it worse…the leftists, although I must admit I am somewhat disappointed with Harper, but hes far better than anyone else out there, I would still vote for him. He’s taking care of our military, that’s a priority to me.

  5. Sarcasmatron   August 14, 2010 at 5:03 PM

    It is now, and always has been, and always shall be the fault of the socialists. Their power is far reaching, like a duster with an extendable arm. Even when they are not in power (which is pretty much always) they are still responsible for everything that ever goes wrong. The way they spend recklessly on massive military budgets while waging billion dollar wars, while never even getting elected is quite impressive. It is too late to save the US, the socialists have just penetrated too deep. But Canada still has a chance. We still have time to fight off this poisin. Stop the spread of socialism, and it’s horrendous budget busting ways.

  6. Cojones Kid   August 15, 2010 at 6:25 AM

    Let dump Jack and that turncoat Bob at the same time

  7. Reg   August 15, 2010 at 8:48 AM

    Contrary to what Sarcasmatron says it is the capitalists that dug the hole that we are in now. More wars are waged to increase profit for large corporations than for socialist reasons. Recessions and depressions are created by greedy bankers and corporate managers not by social workers. If business owners treated their employees fairly then there would be no need for unions.

    There use to be an unwritten contract between business owners and their employees. The employee would give an honest days work for reasonable pay and they would show loyalty and gratitude to their employer. Somewhere along the way the workers became human inventory to be disposed of when it suits the will of the company managers. Now large companies move their plants from country to country with little regard to the people who actually create the product they are selling.

    Socialism only fails when closet capitalists rise to power. Capitalism always fails the masses.

  8. Nicola   August 19, 2010 at 6:06 PM

    It blows my mind that we in Canada are talking about this when Ontario has more debt that California (and a lot less people) and more debt per capita than Greece.
    The loonie isn’t going to stay at this lofty price for too much longer when the market realises Canada is not some paragon of debt virtue.

  9. City Man   August 19, 2010 at 6:57 PM

    Don’t confuse capitalists with their opportunistic kin, the speculators and the thieves.

  10. Arthur   November 4, 2010 at 5:56 PM

    even the japanese have better employer and employee relationships.
    they don’t even need unions because their employers treat them fairly. Even when the economy is looking bad for them, they don’t lay off their workers, they find them something to do for the time being. There wouldn’t be a need for socialist finger pointing and fear mongering if the corporations played fairly. Capitalism works but not with how the United States manages it and there wouldn’t be a notion of socialism if corporate bosses treated their employees with a wage that they can actually live off of.

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