jim4silver
Silver Member
- Apr 15, 2008
- 3,662
- 495
ImpurestStewart said:
I am not sure this is true ImpurestStewart. I know that many look at the time period known as the Great Depression as the worst time in US history, and maybe regarding the citizens' standard of living that is true. But back then the gov did not have the debt level it now has and there was still "hope" in the sense that we later became a great manufacturing nation, etc.
Fast forward to today and we have huge gov debt with lots more on the way, plus we have lost most if not virtually all manufacturing jobs to other countries. Right now the standard of living appears good because for the most part people have roof over their heads and aren't going hungry, but in part that is because it takes a while to evict someone for not paying their mortgage and the government food stamps (refers you back to increasing gov debt). As more jobs are lost more people will lose their homes and ability to buy food (back to more gov assistance = more gov debt that keeps piling up).
I hate to use that term "perfect storm", but it does describe what is coming I believe. We will never get those manufacturing jobs back because workers here refuse to accept the wages third world workers accept, so it will not be in the companies' best interests to move back here. Even service jobs are now in foreign countries (like call centers in India, etc), never to return.
Whenever I read where the US will be great and in shape again (economically speaking) I always ask, "how will that happen?". I have never once seen anyone on the internet or on TV explain how it will happen. Even with democrats, republicans, libertarians, the green party or communists, etc. etc. in power nothing is going to change in my opinion.
In my view what it would take to get us back in the position to be great again (assuming the manufacturing jobs and many service jobs are gone for the near future at least) would also bring about an even Greater Depression, and that is to raise interest rates high, then cut almost all entitlements, end foreign aid, etc. The populace would not stand for this though (at least the taking away of entitlements part), so it will not happen.
What I believe is going to happen is that the debt limit will keep being raised for the near future until it reaches a point where the gov cannot pay the interest payments on gov debt. That would be a real gov default because at that point the gov CANNOT keep printing-- printing means selling more bonds/treasuries, etc, and no country is going to buy them if they are not being paid interest on the ones they already own, even the fed reserve (the so called buyer of last resort) would not want to buy them at that point. If a real gov default happens who knows what that would mean?
What is scary to me is that the average American does not even know or think about any of this. They might know things are getting worse in the economy but cannot tell you why that is.
So back to my original point, I do think we are at or nearing the worst time in US history when it comes to the economic situation. But that is just my opinion and I hope I am wrong about everything I just posted.
Jim
