Apocalypse Now! - American Debt." Well just because I think I can laughingly say I told ya'll so there is no reason for me or anyone else to be laughing now.
Most people don't understand the consequences of the current economic crisis that is unfolding. It is more dangerous by ten fold over the stock market crash in late '08. And this crash could come in a fraction of the time that the markets decended in '08. It took from October 8, 2007 to March 2, 2009 for the stock market to go from 14,000 to it's low of about 6,600 in '09. This crash could start next week. And there will be no fast recovery.
Now that I've hopefully started to scare you. Let's talk about what will actually happen, that should make you so scared you'd want to hide in a mound of monkey feces, if we default on our debt.
There will be a panic inspired stock market crash that will happen immediately. The Richie Rich's of the world would lose billions of dollars overnight. No one except bond holders and parts of people on Social Security will be paid. Medicare, Medicaid, DoD (yup that's our armed forces), and every other part of government essentially. We can afford to pay some people because the government collects tax revenues. But, as the government is borrowing about $0.40 for every dollar it spends, we obviously can't pay for everything if we cut our borrowing power, thus defaulting on countless accounts, businesses, & public entitlements.
As panic sets in, we will have runs at banks just like we had in '08. Remember Washington Mutual, IndyMac, Wachovia? Bank of America, Citibank, and many others are still not financially sound. And, this time there will be no bailout money in the coffers. When the banks go belly up, there is no way to facilitate commerce, thus destroying millions of businesses financially. This lays off the private sector now just as the government already laid off the public sector.
Now panic is truly setting in to the point to which people start drastically changing their behaviors. People start stocking up on food, supplies, and other goods, causing shortages to the point where some people have to aggressively look around to find the food or product that was always around the corner. People buy guns, lots of them, and even more bullets, duh.
Then some asshole gets drunk, high, ripped, twisted, and rolling, brings out the guns and the O.K Corral begins in towns all across America over food, misery, looting, you name it.
This is the end of society as we know it essentially. And, as I said earlier, recovering from this type of system-wide breakdown will take decades, and also put us Americans back in the 19th century.
I do not believe that the politicians will be able to handle the heat from the Fortune 500 companies once the horse is inches from the proverbial cliff. The rich own the Republican Party and when it comes to money, the rich and powerful make a few calls and the politician people in at the last moment give in, much like what we saw before the government shutdown earlier in the year.
The sad part of this entire charade, is that we have a historic opportunity to cut spending, raise taxes on the insanely rich, close tax loopholes, and balance our budget. We would never do something that silly, but at least, I think our politicians are smart enough not to watch the economy drain swiftly down the urinal.
And that's Today's Financially Concerned B-Word.
Wednesday, July 27, 2011
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