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.
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?
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