US Economy “on the Brink of Collapse”
by Jeff Davis
Europeans seem to have a far greater awareness of the degree of trouble, that the USA is in, than anyone here does. The liberal media wants us to think everything is all “rainbows and unicorns” with Obama in office. An article on Breitbart reports: “Economists peddling dire warnings that the world’s number one economy is on the brink of collapse, amid high rates of unemployment and a spiraling public deficit, are flourishing here.
The guru of this doomsday line of thinking may be economist Nouriel Roubini, thrust into the forefront after predicting the chaos wrought by the subprime mortgage crisis and the collapse of the housing bubble. ‘The US has run out of bullets,’ Roubini told an economic forum in Italy earlier this month. ‘Any shock at this point can tip you back into recession.’”
“Back” into recession? Did we ever leave? Seems more like we bottomed out at about a 20 percent real unemployment rate while foreclosures and bankruptcies continued at an alarming pace.
Breitbart goes on: “But other economists, who have so far stayed out of the media limelight, are also proselytizing nightmarish visions of the future.
Boston University professor Laurence Kotlikoff, who warned as far back as the 1980s of the dangers of a public deficit, lent credence to such dark predictions in an International Monetary Fund publication last week. He unveiled a doomsday scenario —which many dismiss as pure fantasy —of an economic clash between superpowers the United States and China, which holds more than 843 billion dollars of US Treasury bonds. ‘A minor trade dispute between the United States and China could make some people think that other people are going to sell US treasury bonds.
That belief, coupled with major concern about inflation, could lead to a sell-off of government bonds that causes the public to withdraw their bank deposits and buy durable goods.’ Kotlikoff warned such a move would spark a run on banks and money market funds as well as insurance companies as policy holders cash in their surrender values. ‘In a short period of time, the Federal Reserve would have to print trillions of dollars to cover its explicit and implicit guarantees.
All that new money could produce strong inflation, perhaps hyperinflation,’ he said.” Imagine that: An economically illiterate African president resorting to printing money regardless of inflation. Does anyone remember Robert Mugabe in Zimbabwe?
The federal government is either going to commit to wild inflation or it’s going to run out of money. What happens if the United States government just plain runs out of money? When no one will lend us any more? When the tax revenues from a collapsed economy with massive unemployment won’t cover even the interest on previous loans and bonds? Eventually welfare and food stamps will have to be cut if not eliminated completely.
Obama recently transferred money from food stamps so he could bail out a number of states, which are having trouble paying their teachers. Obama is struggling just to keep an illusion of “normalcy” up through the November election. After that, many states WILL start running out of money for teachers (and everything else) and the Feds will have to find billions of dollars somewhere to pay back the food stamps program.
The Democrats will choose to print more money, and then the final slide into collapse and anarchy will begin. The Europeans know it. The Chinese know it, which is why they’re trying to unload US Treasury bonds. Despite all the propaganda from the liberals, most Americans know that the economy is in terrible shape. They believe their eyes, not the propaganda from the liberal evening news.