U.S. Economy May Eventually Collapse From A "Perfect Storm" Of Building Problems

Serious mounting problems could eventually collapse the American economy unless some serious problems are reversed. No world society has ever managed to survive for many years the "perfect storm" of mounting problems that could collapse the American economy. Major areas of serious concern include:

The huge growth of the federal debt. In 1989 the federal debt was at $2.7 trilion dollars. By September 2000, the federal debt topped $5.6 trillion dollars. Under the Bush presidency, the debt total now exceeds $8.3 trillion dollars. Within ten years a federal debt of nearly $13 trillion seems likely. In Times Square in NYC a debt clock once posted the shocking increases in nationasl debt. However instead of actually fixing the problem, in 2000 the clock debt was turned off. Apparently no news was seen as better than bad news by the government and American economists who were making little progress fixing the debt problem.

Mr. Bush decided to only complicate the post 2001 recession problems with massive tax cuts to the wealthy class, expensive wars in both Afghanistan and Iraq, and effectively reduced revenues while spending at reckless rates with little restraints on spending.

Individual households are not only saddled with this national debt and resulting interest rates hich figures are roughly $76,000 per American households, but are falling into deeper personal debt themselves for mortgages and credit card debt. In the past five years, American mortgage debt has increased by nearly $3 trillion dollars.

Household savings have dramaticly declined, and many American households now have negative saving rates where nothing is being saved by many households, and more and more credit cards or loans with high interest rates are becoming traps for many households to provide quick solutions to deeper household debt and spending problems. Many Americans have a zero savings rate while workers in China have an average 23% savings rate by comparison.

Rapidly increasing world oil prices are soaring the billions of U.S. dollars flowing out of the nation on a daily basis to nations like Saudi Arabia and Venezuela. By comparison U.S. exports lag far behind that of imports in both goods and real dollars.

The value of the U.S. dollar continues a slow slide against world currencies, with less and less value building over the weeks and months. Many conditions are developing similiar to the currency collapses and debt problems of Latin America in the 1980's for U.S. currency and also U.S. debt. Britain watched it's pound devalue from about $4 in the 1940's to less than $2 today. Britain no longer has the vital manufacturing base or automobile industry it once had, and now has to import many police and fire vehicles from Germany and Sweden because it can no longer even produce it's own emergency use vehicles. During the Reagan years, the U.S. dollar devalued by nearly 40% against it's foreign trading partners for example, while this administration continued to pump out political propaganda claiming how strong the economy was under their leadership when this was blantantly untrue based on the real value of the dollar, debt and foreign trade figures.

The current Iranian hostage crisis involving the 15 British sailors is fueling increases in the price of a barrel of oil by about 4o cents to almost $2 a dollars a day. The culmulative impact of this over just one week's time can be very inflationary all over the U.S. economy, as wages become stagnant or actually decrease.

Many factors on the horizon could be building up to a perfect storm for the U.S. economy unless some real government action to control these problems is in place. However the current administration only responds with more and more "free trade" agreements with countries with low priced labor that manage to take away American manufacturing jobs en masse.

Can the U.S. avoid a huge eventual economic collapse? It's possible. But is it likely?
More and more American businesses are seeking to cut either workers or wages to cut costs. Tens of thousands of American automobile workers have faced contract "buyouts". Electronic retailer Circuit City announced plans to lay off over 3,000 more highly paid workers and either rehire these workers at lower wages or else hire cheaper labor to replace these workers. While inflation of nearly all consumer goods, especially energy and medical care increases, American household wages fall.