Gradually the inevitable story is getting through. Or wriggling out? The future of the US is not just dicey, but probably catastrophic.

The Economic Tsunami Gathering Momentum Off the Shores of America

Our government is a dysfunctional, corporate-ruled mess with a massive debt that has gotten out of control. “A massive tsunami, a mega-powerful financial tidal wave, is growing in intensity off the shores of America” and only we can stop the chaos that seems inevitable.

Published: May 24, 2015 | Authors: Michael Payne | NationofChange | Op-Ed
A massive tsunami, a mega-powerful financial tidal wave, is growing in intensity off the shores of America. This government senses its ominous presence but refuses to prepare for the force that it will unleash. This highly dangerous condition has been brought on by decades of reckless government spending, together with banking and corporate industry policies and actions that further enrich those who are in control of this country.
America now has a monumental national debt of $18.1 trillion which continues to escalate. This debt that totaled some $5 trillion in the year 2000 has increased by 360% during the Bush and Obama administrations. There have been no serious attempts to put the brakes on this out of control spending especially that for the military, except taking such craven actions as cutting back the food stamp program.
Certainly one of the biggest factors in the current downward spiral that America is experiencing is that, instead of this country manufacturing products for home consumption and exports around the world that once pumped money into worker’s pockets and from there into the economy, we now have created a flat, lifeless service economy.
As this has taken place the profits of corporations have soared, dividends to rich owners and investors have followed suit but, at the same time, the majority of the people of America have taken a massive blow. Their wages have been completely flat since 2000 and now many millions of workers have been forced to take lower paying jobs; and in order to try to just survive they take on more and more personal debt.
The estimates vary but studies of Americans’ financial condition indicates that some 60% or more of them are living paycheck to paycheck, not having enough money in their savings accounts to cover at least six months of expenses; enough to help cushion the blow of a job loss, medical emergency or some other unexpected event.
As Americans take on this excessive debt they buy fewer consumer goods such as washers, dryers, TVs, cell phones, computers and a host of other products. This negatively affects consumer purchasing power which, in turn, continues to further weaken the economy. Corporations’ sales, which depend on this purchasing power will, at some point in the future, begin to plummet, driving down stock prices and dividends to investors, reducing profits and causing further reductions in the workforce.
America the debtor nation: foreign nations own over $6 trillion in U.S. securities with China and Japan each owning about $1.25 trillion. A big danger lies in the fact that, if the U.S. financial condition markedly weakens in the future, and the probability is that it surely will, and conditions point to an impending collapse, these countries will rush to unload their investments; or in a different scenario, if the U.S. continues to threaten China with its military force, that country will have had enough of intimidation and could well decide to punish America by dumping its holdings and cancelling any future purchases. That would be disastrous.
Graduating students entering the workforce and taking lower paying jobs are being loaded down with debt and are being forced to hold back on purchases of all sorts of necessities as well as purchases of non-essential but highly desirable electronic products, further adversely impacting consumer purchasing power.
Another area that will require massive government funding, money that it does not have, is the nation’s rapidly deteriorating infrastructure, the foundation of America’s system of commerce. It is now so bad that the “American Society of Civil Engineers says that repairing the nation’s bridges, alone, would cost at least $9.4 billion per year for the next 20 years. Another estimate by the ASCE puts the cost of bringing the entire US infrastructure up to an “adequate” level at $1.6 trillion. Well, to get this done before the infrastructure crumbles the Treasury Dept. can jumpstart their printing presses and just create more “fiat” money and add that much more to the national debt.
Both Social Security and Medicare are both going to have severe financial problems going into the future and hundreds of billions of taxpayer dollars will have to be pumped into them in order to keep them afloat; just where this funding will come from no one knows but you can bet it will add greatly to the national debt.
All that is bad enough but if you want to know where the biggest threat to this country’s financial stability lies here it is: Let’s talk about the Fed’sQuantitative Easing Program. This article explains the QE program as well as any I’ve seen as it illustrates this program’s complexity and the fact that it creates money out of thin air that is then given to banks to initiate loans to businesses. What it looks like is yet another government financial boondoggle that will be a major contributing factor to an eventual financial collapse. Here’s an excerpt from that article that shows how ineffectual and dangerous it is:
“However, it (the QE) didn’t achieve the Fed’s goal of making more credit available. It gave the money to banks, which basically sat on the funds instead of lending them out. Banks used the funds to triple their stock prices through dividends and stock buy-backs. The large banks also consolidated their holdings, so that the largest .2% of banks now control more than 70% of bank assets.” And this massive giveaway program to the banks has been going on since 2008 at a cost of over $4 trillion and at a rate of $85 billion per month for a great part of that time.
In this article a former Federal Reserve high level official, Andrew Huszar, issued these words of warning: “If the Federal Reserve continues to wildly create money out of thin air with no end in sight, the rest of the world may decide to stop lending us trillions of dollars at ultra-low interest rates. When we get to that point, it is going to be absolutely disastrous for the U.S. economy and the U.S. financial system.”
We can call this a massive economic tsunami heading directly toward America or we can call it another Perfect Storm building up tremendous power in the skies above America but what in the world is going to stop either? This dangerous condition cannot be avoided unless this American government finally decides to take numerous drastic actions to bring this situation under control. The chances of that happening seem to be zero to none.
Those well respected economists in America who are not wholly owned and controlled by the corporate media are well aware of the dangers that lie ahead for America if its leaders continue to refuse to address these economic woes. Many say that this country has never actually recovered from the 2008 crash and that we could be in for an “aftershock” of massive proportions in the next one to two years; that’s how alarming the warning signs have become.
This highly dysfunctional, corporate-controlled government of ours totally dismisses these warnings and totally ignores the alarms beginning to go off across America; that this massive tsunami is building up momentum and it’s only a matter of time before it heads toward this country and unleashes its massive power.
Nation of Change