House of Cards –The Fall of the Empire
The
largest economy in the world is the United States. The US government is
currently 12 trillion dollars in debt and I project that to go to 15 trillion or
more by early 2011. Paying the interest on that huge debt in future years will
cost about as much as what is spent on national defense. The United States is
now by far the biggest debtor nation in the world. For many years they have been
importing hundreds of billions more dollars in goods and services than we are
exporting each year. In 2005 through 2008 the trade imbalance averaged well
over 700 billion dollars per year! Trillions of US dollars are now in the
hands of foreign investors who at any time could dump the dollar causing a
devaluation of the currency. Stephen
M. Studdert a former White House adviser for four U.S. presidents says America
is on the verge of financial and political upheaval unless the country makes
substantial changes in the very near future. Mr. Studdert said the country is facing
economic threats on various levels, including growing government and corporate
debt and further described the U.S. as "bankrupt as a
nation."
Without going into details the US has the following
pressures on its economy
:
·
Unfunded
federal liabilities
·
Unfunded
pension liabilities
·
Housing
bubble
·
Credit
crunch
·
Indebtedness
to China
·
China's
exponential growth
·
Negative wage
growth at a rate not comparable to productivity and
profits.
·
Spending
beyond our means
· Defense spending
·
Gambling with
investments taking your money and using it as security to leverage
investments.
·
Global
"war on terror", which has carried a price tag approaching the US annual
GDP
·
Import
of cheap labor in program as H-1 and immigration to reduce labor costs and
wages
·
Unemployment
and layoff culture eroding the faith of the American people in its
economy
·
Saudi
Arabia’s potential to cause us an
overnight economic calamity because of oil
·
Russia,
Pakistan, Iran and North Korea as possible threats to America's national
security having an impact on our economic future as well.
(Details and research
data for the above point could be provided if needed)
Without
going into details the US has the following pressures on its
stability as a country and as a society
:
·
Politicians
who are not statesman (mostly lawyers)
·
Political
dishonesty because the amount of money involved in the nation's political
system
·
Lawyers
that run the country and enact laws to profit themselves’
·
Lobbying
groups that have their interests than the interests of the people
·
Family
structure falling apart because of liberal social and family court
laws
·
Fatherless
Nation effect on the psychological makeup of the nation
·
Multi-cultural
multi-ethnic society without any common denominator except
money
·
Layoff and distrust
mentality - every sector of the US
economy has been negatively impacted by layoffs
·
Escalating health
services costs
·
Distrust of
Government
·
Distrust of police
and the law
·
Culture of violence,
promiscuity, lawlessness and uncontrolled consumption
·
Working Hours
-Working and middle class Americans working longer hours, and then take on
second and even third jobs, in order to maintain living
standards.
·
Lost job security and
no work place loyalty
·
Class and Income
disparity
(Details and research
data for the above point could be provided if needed)
The Fall of The
Empire
For
a generation the growth of the US economy has been disproportionately driven by
the availability of cheap consumer goods and investment credit. This massively
unbalanced mechanism was not only rooted in the financial sector but
the manufacturing and service industries as well. Since the 1820s, the US economy
has experienced steady gains in productivity. This led not only to steadily increasing
profits for corporations but also to rising working class wages and, with it,
consumption levels. Today everyone is
afraid to lend because the chances are good that they will never get paid back.
That means that corporations cannot borrow to cover short term loses and
expenses. So instead these corporations cut back on employees and benefits
trying to keep their company afloat. Obviously when more and more people no
longer have jobs and income they will start defaulting on their own debts
causing a further downward spiral. To maintain the government spending, Taxes
must be raised and so deficit spending will dramatically increase. If taxes are
raised, it will kill the economy and the debt load will get worse and not
better. Government spending will not be drastically cut because these types of
cuts would never get through the political system. Without considering the current state of
economy, a massive terrorist act will bring down even a healthy economy and its
results will be dreadful.
Two thirds
of the families in the US are now invested in the stock market compared to three
percent in the great crash of 1929. When the economic crash comes, retirement
accounts, mutual funds and most paper wealth will be wiped out. Most banks and
financial institutions will fail, be bailed out, or be taken over by the
government (causing further devaluation of the dollar). Most people making a
living on the service sector of our economy will be unemployed. Prices on
everything made in this country will either deflate or paper money will lose
most of its value. The resultant depression will affect everyone and it will be
the worst that this nation has ever known.
The
fall of the US economy compounded by a massive terrorist act will have a domino
effect and bring about a worldwide depression that will further depress the US
economy and bring a full fledged inflationary depression worse than the great
depression of the 1930's. When this happens most companies will go bankrupt and
will be nationalized. When the US economy goes down it will take the world
economy with it. This economic collapse will cause great civil unrest all over
the world; cities will be filled with riots and later with troops. Democracy
will be dead and people will look to demigods to solve their problems. When the
economy of the West crashes Russia, Iran or China may get ideas to invade other
countries specifically the Middle East to seize its oil.
If there is a civil breakdown, secession movements will flourish, rioting and violence
will be the new way of life. A new civil war may be one
of the outcomes of this breakdown of society and the end of Democracy in the
Western World. .