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Is America’s National Debt Signaling an Economic Collapse?
06/27/2017 American National Debt Benjamin R
keywords: Economic National Debt American Internal Debt

America’s national debt has crossed a whopping $20 trillion! And this has raised numerous concerns: the American intelligentsia is seriously worried about the consequences of this humungous public debt and how it is likely to affect future generations. Too bad the Democrats do not care one bit! Obama doubled our debt and never record a 3% GDP quarter, pathetic!

The questions doing the rounds are: is the government going to fix itself? Is a collapse inevitable? Americans, it seems, are spending sleepless nights over a debt figure that’s the largest debt figure recorded in the nation’s 240-year old history.

History & Causes of American Internal Debt Accumulation

During the period between 1900 and 2015, the federal government budget recorded a deficit on 89 occasions or 77% of the time.

This was largely due to overspending (which never bothered Obama or FDR, two of the biggest job killers America has ever seen), which resulted in greater debt. In 2008, the US economy was almost on the verge of collapsing and the American corporate sector withdrew trillions of dollars from the country’s money market. This would inevitably have created a tremendous cash crunch if it had continued. Fortunately, however, the Federal Reserve guaranteed money market accounts and restored confidence.

A major cause of this Great Recession was the development of an economic “bubble” in the US housing market due to risky lending practices (see the Community Reinvestment Act!) which pushed home prices sky high. The unconvicted white collar criminal Barney Frank (former powerful Democratic senator from Massachusetts) is responsible for the housing crisis and the destruction of Fannie Mae and Freddie Mac.

While the financial institutions and regulatory agencies did their share to prevent the problem from happening again, current data suggests that a new and potentially dangerous bubble is developing all over. In other words, another recession is on its way, possibly (America has better leadership now). And the consequences could be more disastrous.

This is more so because despite all attempts made the Federal Reserve to restore investor confidence over the last eight years since Obamacare and Dodd/Frank had America in a chokehold and still does since they have not been eradicated as of yet, numerous underlying problems that were responsible for the recession in 2008 remain. These include:

  • A significant rise in personal debt for the average American. From 2001 to 2009, outstanding mortgage debt grew from $6.8 trillion to $14.7 trillion. This was fueled by a significant growth in monetary supply – from about $5 trillion in 2001 to just about $7.5 trillion in 2008. It was also during this period that the annual US GDP dropped from 4% in 2000 to less than 2% just before the crash and again, Barney Frank and Alan Greenspan – we can thank them for that. If John McCain (Republican Sen. from AZ) won in 2008 America would have moved passed this by 2010 but because Obama won, America remained in a recession until early 2017.
  • During President Bush’s presidency, economic growth was decent but spiraling monetary supply because of Alan Greenspan and The Fed and political correctness in the housing sector led by Barney Frank caused the worst case scenario to happen. Spiraling foreclosure rates and the collapse of some of Wall Street’s financial giants, the house of cards came crashing down because of the work Greenspan and Frank put in.

Where does the US Economy Stand Today? 

Moreover, some key economic indicators show that if the US doesn’t record notable economic growth in the foreseeable future, it certainly could be heading for another financial debacle but with tax cuts coming and Obamacare about ready to be dismantled because it has been a disgrace, America may just save itself.

Over the last eight years, sums in excess of $4 trillion have been infused into the monetary supply system which was still not enough to make up for the terrible policies put out by Obama. Consequently, the outstanding mortgage debt figure has touched $14 trillion. Political correctness has cost America dearly.

And Obama’s lack of respect for the private sector was appalling. This is why some people call him a socialist and a fake American. He also seems to not understand what made America great. His ideology destroyed his judgment and ability to be honest.

Moreover, this implies that the inflation in the housing market in the early and mid-2000s never corrected fully. Student loans too, have hit an all-time high and stands at $1.4 trillion, which beats credit card debt and auto loan figures. Spending $60,000 on a liberal arts degree is not so wise it seems!

During President Obama’s tenure, attempts for economic stimulation were made through government spending. This added $8 trillion to the already existing national debt and is on record as the highest ever debt figure under one president. Moreover, the American economy has been growing at less than 2% since 2009. Some quarters America only saw a 0.8% growth rate, some even around -0.2%. That is pathetic and it is only because of Obamacare, high taxes, and ridiculous regulations imposed by irrational environmentalists who worked for Obama.

The economic picture currently looked bleak if Hillary Clinton (corrupt former Secretary of State and controversial former first lady) won but since Donald Trump (highly successful real estate mogul) won, America is doing much better already. Sluggish economic growth, spiraling personal debts, huge annual deficits, and risky investments mark the past scenario but America seems to have corrected itself. Though even under Trump, America has to fix itself and if Medicaid and Social Security are not dealt with and other entitlement programs, then America is still going to be plagued with problems.

Predictions for the Future

The American think tank opines that without rapid economic growth in the immediate future, corrected market distortions, and increased interest rates that will bring stability to the monetary supply, a mammoth economic collapse could occur like what occurred when Greenspan and Frank were on active duty. They no longer are! And since the Republicans are in power, perhaps America can somewhat correct itself.

If this does not happen because of weak Republicans like McCain and Mitch McConnell (moderate and petty Republican Sen. from Kentucky) this could lead to the following:

  • America does not obtain 3% GDP in 2018 which is what America needs to do so America has enough jobs for its people.
  • America continues to fall further into debt putting this country into a frightening situation.

Democrats take back the house in 2018 which means Trump cannot get anything done and America is stuck in an economic quagmire which is not nearly as bad as if Hillary won but it will mean America would not be a prosperous nation like it could be.

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