By Michael Snyder, on March 25th, 2010
An overwhelming majority of American voters now believe that the United States could experience a total economic collapse. According to the latest Fox News poll, 79 percent of U.S. voters believe “it’s possible the nation’s economy could collapse”, and the poll found that this belief in the fragility of the American economy cuts across the entire political spectrum. The truth is that the American people, at least on some level, know that a day of reckoning is at hand. For decades, America has been enjoying the biggest party in the history of the world, but unfortunately that party was fueled by a gigantic mountain of debt, and now the bills are starting to come due. Unfortunately for those trying to do something about this economic mess, the American people are starting to realize that the U.S. economy is now basically a house of cards, and that could lead to massive financial panic when things really start to fall apart.
Normally when a poll is taken, you can see big differences in the responses based on the party affiliation of those being surveyed. But in this poll everyone seems to agree – the U.S. economy could experience a complete and total collapse.
Not only did the poll find that 84 percent of Republicans believe the U.S. economy could fall apart, 80 percent of Independents did as well, as did 72 percent of Democrats.
Only 18 percent of the respondents to the survey believed that the economy is “so big and strong it could never collapse.”
It is very rare these days when a large majority of the American people will agree on something.
But unfortunately, they are completely and totally correct.
The U.S. economy is in a death spiral.
So how in the world did we get here?
The answer can be summed up in one word.
Debt.
The United States has piled up household, corporate and government debt at a pace that is mind blowing.
Once upon a time, the United States was the wealthiest nation in the history of the world.
But that was not enough for us.
We had to have more.
So we went out and squandered the wealth of this nation but that wasn’t enough either.
So we started spending hundreds of billions and then trillions of dollars that belong to future generations.
All of this to fuel the greatest party the world has ever seen.
And it has been a great party.
But you can turn out the lights because the party is almost over.
It is very easy to blame the U.S. government for getting into so much debt, but they are not the only ones who have been piling up debt at an insane pace.
In fact, millions of individual Americans have been living beyond their means for decades. Just check out the chart below which shows the growth of household debt since the mid-1960s….
Now tens of millions of Americans are massively overextended and are crying to the U.S. government for help. But nobody forced them to get mortgages that they couldn’t afford. Nobody forced them to max out their credit cards. Nobody forced them to fill up their garages with luxury vehicles.
In large part, we did this to ourselves. U.S. credit card debt per household only crossed the $1,000 threshold in the mid-1980s. Now it is over $8,000 per household….
But the corporate world should shoulder plenty of the blame as well. Corporate debt has been exploding at an exponential rate while profits have remained relatively flat. There is no way that this ratio of corporate debt to profits is sustainable….
And of course the biggest culprit of all is the U.S. government. They have piled up the biggest mountain of debt in the history of the world, but are we not at fault for continuing to elect leaders who keep putting us into so much debt? However, there are some signs that the American people are starting to wake up about this. According to the Fox News poll, by a nearly three-to-one margin, voters believe that the national debt (65 percent) is a greater threat to America’s future than terrorism is (23 percent).
So will this change anything when the next elections come around?
We will see.
Meanwhile, the damage has already been done. The U.S. Congress recently approved an increase in the federal government debt cap to 14.3 trillion dollars. In 2010, the United States government is projected to issue almost as much new debt as the rest of the governments of the world combined. Thanks to the horrifyingly bad management of our finances by our nation’s leaders, the legacy that we are leaving to future generations is the biggest mountain of debt that humanity has ever seen….
Unfortunately, instead of learning from the past and trying to reduce debt, the U.S. government just keeps spending money and piling up debt faster and faster.
But if they stop all of this reckless spending the U.S. economy could plunge right into a depression of unprecedented magnitude and pretty much everyone would be voted out of office.
But if they keep on with all of this reckless spending the long-term consequences will be catastrophic beyond anything that any of us can even imagine.
Either way, this thing is going to end really, really badly.
Whether you want to face it or not, there is no economic future for the United States under the current system.
Enjoy things while they are still relatively good, because this is as good as things are going to get. Incredibly hard times are coming and we all need to start getting ready.
