USA bankrupt

[Maximus Zeebra]

I have been thinking this for years, that the US is actually bankrupt, but that economies such as Italy and the UK in particular also, and other European economies to a lesser degree.
But the last few days I have read in my economics24 newspaper from Norway that two prominent professors one from Switzerland and one from Denmark is following in the footsteps of several others and declare the US bankrupt or near bankrupt. With the Russian professor even predicting the total collapse of the US, not just economically, but in other ways as well.
The two first professors are in agreement that the reason that the US is yet to collapse is because of the size of their economy, and they are both uncertain if it will collapse, but both agree that spending further money like the US is planning now and running further deficits will most likely collapse their economy..

Actually I amp stuck with the feeling that US politicians have given up and that they purposefully with their new suggestion is actually trying to drive the US into bankruptcy and then having to fail on their debt and hope the US will survive that way, but what would the consequences be of such a thing? The US could collapse as a result of an enormous wave of poverty, or the developed world those who can afford it would isolate the US and just increase activities with each other and step up with their reforms to make more centrally planned economies.

These are exciting times for the economy and the future of some nations and the future of our geo-political world... What do you think about this issue of economy? Do we need to rethink the way our economies work? Have capitalism in general failed? What are the alternatives? Will the US purposefully go into bankruptcy and forfeit on their debt? Was Iraq just a step in this progress in securing at least oil resources? Will the US start more wars? How will the global forces of power change? Will the US stay relevant or become relevant? Will other superpowers emerge from the shadows?

What is actually going on in the world today? Are we so deeply into trouble that there is just no way to avoid disorderly collapse or take control? Will there be wars? Will global economic fortune shift from the west to the east?

Rrrrr.. The only thing I know for certain is that things like they are today cannot continue like they are, this goes for both our economic and political models..


PS. No English sources for my information, but I am including two Norwegian articles that you perhaps can translate yourself with babelfish or something. And I include some Norwegian and English links on the Russian professor.

Danish professor Jørgen Ørstrøm Møller says the US is technically bankrupt because households, companies, foreign debt and the federal debts are so high. He thinks it will get worse with the increased spending..
Professor: - USA er konkurs ( , Makro og politkk )

Swizz professor Marc Faber, he things the dollar will collapse as a result of the broad economic collapse and the lack of faith in the US economy, and that countries will be unwilling to lend the US money, which will result in even worse numbers, he says the US government can either forfeit their debt and run bankrupt or that they can pay it back and make the dollar worthless.
- USA vil gå konkurs ( Makro og politkk )

Igor Panarin, Russian professor has predicted the collapse of the US for a decade and thinks it now has started and that the US is several stages into a total collapse.. You can check him out on google, easily available info.

 

[JoeMama]

The US economy can not collapse, unless the world plans on going into a recession much much much worse than the Great Depression.

Look what US's economy did to the world when it went south during the Great Depression.
-Now imagine what that would be like with the US even stronger amongst the world's nations, and with an even more global economy.

What would happen if the US economy collapsed (the smiley is the world):smash:

 

[Maximus Zeebra]

What would happen if the US economy collapsed (the smiley is the world):smash:

Not really.. European economies have a strong integrity and a structurally independent economy which would only see reduction in activity if the US economy collapsed. We make all our food ourselves, we have an educated able population, great industry, manufacturing and so on. We have a diversity of customers. Our economy would not collapse..

Africa is so poor they would barely notice a difference.. Asia would see most of the collapse as well as south American economies that cannot manage without the global economy.

Both Europe and Africa would see their economies totally change, but would not at all be crushed, nor collapse. Every day life would change, but we would easily survive and manage and Africa would still have the same type of problems as today with increased food problems.

 

[RightOfCenter]

Not really.. European economies have a strong integrity and a structurally independent economy which would only see reduction in activity if the US economy collapsed. We make all our food ourselves, we have an educated able population, great industry, manufacturing and so on. We have a diversity of customers. Our economy would not collapse..

You're showing your lack of understanding of global economics. When it comes to the economy we truly are all in this together. US deficit mistakes will hurt everyone, Europe and Asia especially. China and perhaps India would come out so far ahead of the rest of the world if the US collapsed it would be scary.

I do agree with most of what you wrote in the OP though. The US is bankrupt. I don't know if it will cause economic collapse, but it may.

 

[creativedreams]

maybe the USA will just file bankruptsy....then we'll be debt free!... only to have bad credit for 7yrs... and the we can start spending like crazy again!

 

[creativedreams]

Not really.. European economies have a strong integrity and a structurally independent economy which would only see reduction in activity if the US economy collapsed. We make all our food ourselves, we have an educated able population, great industry, manufacturing and so on. We have a diversity of customers. Our economy would not collapse..

Africa is so poor they would barely notice a difference.. Asia would see most of the collapse as well as south American economies that cannot manage without the global economy.

Both Europe and Africa would see their economies totally change, but would not at all be crushed, nor collapse. Every day life would change, but we would easily survive and manage and Africa would still have the same type of problems as today with increased food problems.

I think this went right over rightofcenters head...

 

[Maximus Zeebra]

maybe the USA will just file bankruptsy....then we'll be debt free!... only to have bad credit for 7yrs... and the we can start spending like crazy again!

Isnt that why the US is taking on more debt to deal with the problems caused by debts in the first place? It seems to me your politicians are trying their utmost at the moment to spend as much money they can now to ACTUALLY put the final nail in the coffin and drive your country to actual bankruptcy, so that you can forfeit on your debts and then hope the US will manage a global economic collapse better than others.

 

[creativedreams]

Isnt that why the US is taking on more debt to deal with the problems caused by debts in the first place? It seems to me your politicians are trying their utmost at the moment to spend as much money they can now to ACTUALLY put the final nail in the coffin and drive your country to actual bankruptcy, so that you can forfeit on your debts and then hope the US will manage a global economic collapse better than others.

Yes it certainly looks that way!

I feel that the easy ability for americans to file bankruptsy and be debt free just to have bad credit for 7yrs with many people actually repeating the cycle and filing more than once is a big part adding to the economic pyramid ready to completely collapse.

Plus the fact that modern credit allows almost every person to be way deep in credit debt. Many people pass away deep in debt or just lose it and not pay their debts or file bankruptsy, etc.

Near the top of the pyamid are the upper middle class who are fast becoming the only ones who can afford health insurance.

Everything is eventually going to be pushed to the very top of the pyramid to where it requires government intervention (mortgages and stimulus) and if the government is already broke the whole economic pyramid will collapse. Then there may have to be a complete new economic structure implimented.....unless of course a major war happens then we can repeat the economic cycle!

There are many flawed factors on our cycle of economic credit/debt.

I believe lawsuits with an obsene amount of money paid out for medical mistakes plays a part too. Perhapse there should be a much lower cap on being to be able to sue in all areas because it falls on the insurance.?

 

[conquer]

If US falls deep, Europe will come to the rescue...for a price.

Neither Europe or US can allow the raising of China or Russia, and if US is causing the bankruptcy, then is to form a "forced" economical alliance with Europe at a higher level.:coffeepap

 

[creativedreams]

If US falls deep, Europe will come to the rescue...for a price.

Neither Europe or US can allow the raising of China or Russia, and if US is causing the bankruptcy, then is to form a "forced" economical alliance with Europe at a higher level.:coffeepap

I hate to say it but china's going to pass us up like we're standing still!!!

We are not in a very good situation at all.

I have a prediction of how things are going to play out....I sure hope I'm wrong!

If somehow by some miracle we pull out of this... and avoid a world tension war...

Our government should incorporate legislature regulating any interest rates, loan availabilities, and lawsuit caps, tax rearangements, etc. With the help of a few math geniuses to figure out the ballances to keep an economy from snowballing to a mountain of credit debt that can only collapse. Not much unlike big insurance companys hire math geniuses to figure out their policy rates and premiums.

 

[Arch Enemy]

We make all our food ourselves, we have an educated able population, great industry, manufacturing and so on.

Can I see a source for this?

 

[Maximus Zeebra]

Can I see a source for this?

No... Do do the research yourself. Should be easy to find.

Id like to see a source that the US have the greatest military in the world! Many people say that, but none have a source available.

 

[JoeMama]

I hate to say it but china's going to pass us up like we're standing still!!!

We are not in a very good situation at all.

I have a prediction of how things are going to play out....I sure hope I'm wrong!

If somehow by some miracle we pull out of this... and avoid a world tension war...

Agreed, this'll be tough.

If China does not grow at a sufficient rate - then unemployment ensues; So basicly, if China doesn't grow fast enough, it can't keep demand with the rising population....And if they can't do that...well then, expect to see some protests....And from what I here they are beginning to start...

 

[Goldwater]

Not really.. European economies have a strong integrity and a structurally independent economy which would only see reduction in activity if the US economy collapsed. We make all our food ourselves, we have an educated able population, great industry, manufacturing and so on. We have a diversity of customers. Our economy would not collapse..

Africa is so poor they would barely notice a difference.. Asia would see most of the collapse as well as south American economies that cannot manage without the global economy.

Both Europe and Africa would see their economies totally change, but would not at all be crushed, nor collapse. Every day life would change, but we would easily survive and manage and Africa would still have the same type of problems as today with increased food problems.

I was looking around this forum, and noticed this post; at first, I was initially inclined to give it to you - yes, if the world's largest market (not through population, obviously, but at least by how much America buys) decided, tomorrow, that it did not exist in any shape, or form; sure, Europe would not collapse. Yet not because of any such bemusing adjectives you apply to it. Indeed, the last one I believe we should describe Europe is that Europe, in any shape or form, is economically 'independent.' I won't read to much into that comment, honestly, you likely forgot the last time Russia decided to cut off your gas supplies; I haven't, and it has happened again. Thus, we can conclude, through that single case study; just how not Europe is economically independent.

Then there is the "strong integrity" comment, thrown in there; with the hope and prayer someone wouldn't notice, I suppose.

It is a economic marvel, I suppose you could call it, how much Europeans do not buy; not just compared to America, we're talking about compared to everyone in the whole world. Consumer confidence takes a new low each time anything hits a new, well, anything. While, and this is true speculation, they conserve and hoard their money; grow at marginal rates, Europe still manages to get caught with its shorts down when a financial crisis explodes in America and to a smaller extent, secondaries in Spain, Britain and Ireland; which wouldn't have honestly happened without easy credit and leverage tactics first employed by the good old Stars and Stripes.

Which is very interesting, in of itself, for the Euro-happies (as oppossed to Euro-skeptics, I suppose) fail a lot instead of doing what your politicians have sworn up and down (documents which are fairly searchable) your economy would do: weather the storm, indeed it goes straight down the toilet just as fast (which, considering the sluggish changes in Europe's growth rates is a lot worse then it sounds) as the epicenter of the crisis.

Methaphorically speaking, a pin drops across the Atlantic and Europe hears a sonic boom. Decoupling hasn't happened, and you should hold less contempt for the "insurgents" who aren't as into direct democracy as you are. Or for that matter, oppression.

No, Europe would not collapse if America collapsed is because such a highly developed economy does not collaspe automatically because a large chunk of it goes missing; however, would it mean a sort of perpetual poverty? Undoubtably, China sure doesn't need you. Africa sure doesn't need you, hell - Russia doesn't even need you. Europe wouldn't collapse, but would it be a bigger, colder, less friendly world? Oh yeah, and good luck.

 

[Maximus Zeebra]

Which is very interesting, in of itself, for the Euro-happies (as oppossed to Euro-skeptics, I suppose) fail a lot instead of doing what your politicians have sworn up and down (documents which are fairly searchable) your economy would do: weather the storm, indeed it goes straight down the toilet just as fast (which, considering the sluggish changes in Europe's growth rates is a lot worse then it sounds) as the epicenter of the crisis.

This is just dishonest. There is no collapse in Europe like there is in the US, with exception of the UK and Spain. If you take Europe overall, there is just a tiny setback, and many countries do not even have setbacks. Yes our unemployment has risen from 7.2% to 7.8% the last year, but that is nothing considering the US unemployment has risen from 4ish% to 7% in the same period, and that 2 of the European economies which are taken into account in the total European number, Spain have risen from 8% to 14% and the UK from 4.8 to about 6.5%(last 3 months numbers arent out yet, so I am assuming based on trends, and the number was 5.9% in November)..
GDP is not yet in negative on the year, but has seen a slower contraction the last 6 months than the US which is tipping over into annual decline very shortly. If you look at tendencies in components of GDP, European numbers look far healthier, since American collapses in all sectors have declined rapidly but have been offset by a temporary large increase in exports, which makes the numbers look somewhat better. The European numbers are overall similar in all components of GDP, much slower rates, but barely positive. As for debts in Europe as opposed to the US that is a very different story, where the US is being dragged down by enormous debt commitments, while Europe doesnt have this problem to the same extent, except the UK and Spain, which surely are noticing their past sins, and how living above ability is punishing them now with this financial crisis being a revaluation of the economies, where indebted economies are punished most severely. This is where European "cheapness" comes in handy, since we have more fiscal responsibility our setback is ONLY caused by the collapse in the US, our main trading partners, and not by economic factors in our own economy, like it is in the US, and the UK(which is our only economy which is experiencing setbacks because of internal factors).

Thats why my prediction is that the UK will collapse the fastest and most followed by the US, and Europe in general having a setback as a result of that, and Spain suffering most as a result of setbacks in Europe.

No, Europe would not collapse if America collapsed is because such a highly developed economy does not collaspe automatically because a large chunk of it goes missing; however, would it mean a sort of perpetual poverty? Undoubtably, China sure doesn't need you. Africa sure doesn't need you, hell - Russia doesn't even need you. Europe wouldn't collapse, but would it be a bigger, colder, less friendly world? Oh yeah, and good luck.

Yep, poverty indeed for awhile, until we offset the losses of the US.. But at least we would not starve and get into structural problems like for example Russia and China. In Africa there would be no noticeable difference, except more people would starve.

And for the record, I hope the US can manage this mess, but by the actions they are taking it rather seems like they are putting a final nail in the coffin over there by taking on more debt to stop a situation which was created by debt and fiscal irresponsibility in the first place. And also for the record I think the same would be true for the US, that they would also survive if only Europe collapsed, the same way, in poverty, but at least not starving and having structural problems like China and Russia. And for the record also, I think the UK economy is about to completely collapse because their economy is too small as oppose to the US(maybe, but only if they take no more debt) at taking on the debt burdens they have taken on. The UK is really imploding atm. Within a few years their economy could be smaller than Poland, unemployment at astronomical levels, and stuck in a situation where they have to pay back most of their debts before they can start growing again.

 

[Goldwater]

Snippet

Let me be honest with you, I am not talking about Russia or their energy fueled dash with her other consorts of BRIC. I am not talking about Eastern Europe and their very free, very competitive, and very well placed economies. Indeed, I am a tad disappointed you went straight to involving the whole of Europe; that's not very European, is it? No, what I believe we should focus on, is one economic system, or another - indeed, should we consider the European Union as a stand alone economic system, and the poor bums not in it; not in it.

So let's just go straight to the no punches pulled, The European Commission (remember, these guys are supposed to be the optimists) is expecting GDP in the European Union to fall by about 1.8% in 2009 before recovering moderately to 0.5% in 2010. This figure, I hasten to assure you, just gets a lot worse if you minus such odd balls in the group like the Czech Republic; you know, the noobs who haven't boughten into the whole 'socialism is good' scheme. Now if you throw that out, and just look at the true die-hards, the ones of the EEC; then oh hell does it get bad. Not one of them are going to be posting positive growth, or any unemployment gains of anything approaching 'modest.' Now, I'm not going to go out of my way to do all the fun stuff of seeing just how those old economies are fairing, combined, but to say that everyone else whose been added to the EU in the past few years is picking up the slack; using inspiration from the American economic train of thought, could be a fairly accurate opinion.

Also, there's that whole Italy thing - you know, it's government will be in too much debt to still comply with the EU's stringent rules on Euro users. Now, I hate to be a doomsayer, but there is reason why the Euro just isn't where it was a year ago, and if anything, I would say that the recent decline in the Euro is my best evidence.

There's France, whose economist minister said, in a very scientific and objective way that the next year will be: "bad, very bad" which is, if you read it in the context, something like if Greenspan informed us "we're dead, I'm going down the street to convert my holdings into gold." Which doesn't sound good, any way you look at it.

And there's Iceland, whose banks really did implode, and you know them - those greedy buggers.

In short, the US economy has had some very serious shocks, but to pretend that Europe has somehow gotten away, weathered the financial storm? Is, in of itself, bemusing. Yes, you have low debt, but you'll never have a domestic market. There's just no other way to put it, Europe is a bunch of old, toddling, stack of cards busy leeching off the new guys for their vibrant markets. America always goes down harder, and faster, then Europe ever does; Germany and France were 'overheating' around 2; Federal Reserve considered a similiar limit at 5 percent for the United States. So to be even roughly equal, you would have to decline by... Well, what most of Western Europe is declining to be perfectly honest. You can throw unemployment numbers around, and 'dire' economic news, but to fair the U.S. has clocked in as much growth as your pick of any four developed European economies since 2001.

 

[Maximus Zeebra]

last posting

Well, of course you have to consider both the Eurozone and the EU individually and the nations within it. The ones faring worst over a period is Italy, Greece and Portugal in the Eurozone, economies who arent used to changing the fundamentals of their economies, but instead have stayed competitive in the case of Italy by devaluing their currencies, constantly, and stay somewhat competitive like Greece and Portugal did by develuing their currencies. But all in all this is a bad strategy compared with actually changing the fundamentals in the economy rather than devaluing the currency.

Take for example one measure.. Making it easier to start a business in any given European country, and cheaper, and less paperwork and time and so on, in the end this would be far better for the economy than not doing it and just devalue the currency. Some countries havent adapted to this way of thinking in the Eurozone that they have to stay competitive in other ways than devaluing their currencies, and the worst boy is Italy, followed by Greece and Portugal, and these countries are the ones who have had the slowest growth in Europe over the past 10 year, even the past 20 years(even before the Euro).. The Eurozone is made up of mostly fiscally responsible nations, except perhaps Spain, who is paying for their irresponsibility now, but without dragging any other nations in the Eurozone with it, this is quite amazing taken into consideration what the Eurozone is and how other economies offsets each others.
Actually the point of all this is that the Eurozone is a rather stable economy, no matter what happens and only the total of who is in it affects the currency, so the weakness of Spain and Italy in particular has lead to a weakening economy, while the strength and resilience of Germany and France has kept it strong, and continues to do so.

Then you have the Eurozone vs the EU-27, whereas the Eurozone is having the biggest quarterly declines in GDP while the countries outside it is loosing jobs the fastest. And job loss is very relevant in bad times, and its not funny, but relevant to mention that most countries in Europe with a few bad exceptions still have lower unemployment than they had a year ago. Such as for example Germany, and that France for example only has 0.1% higher unemployment than a year ago.

Then if you start looking at the reasons for this financial crisis, its caused by a lack of trust in the economies, and that lack of trust is apparantly biggest in the UK and then followed by the US, while the Eurozone apparantly got most new investments and holdings the past year, judging by the Euro strenght, but that this luckily was offset and the Euro weakned on some bad news in the Eurozone as well, but no where as bad as the news is in the UK and the US.. The dollar ofcourse being an old currency is still more trusted than the Euro in the general, and have received some investment the last 3 months of the crisis and strenghten again, but thats only because people havent taken into considerations the fundamental weaknesses of the US economy, as they saw temporary setbacks in the Eurozone and moved their money from it to the US. Now the worst news are again coming from the US, like they have all along, while less bad news are coming from the Eurozone which at one time seemed completely immune from the crisis, but appeard not to be and temporarily lost value. The looser in all this is the UK, which is seeing their value flushed down the toilet, while the US and the Eurozone wrestle against each other over who is the most credible and strongest economy. And considering the Eurozone is only a decade old, that is pretty good news for Europe, and pretty bad news for the US.

I suggest you take a look and browse through some numbers on eurostat and then the UK and US agencies afterwards, and you will see that overall, that in Europe its just a setback, while in the US its a crisis and the UK a collapse.

 

[Goldwater]

Last Post

There is no reason for me to sound rude, but at the same time there's no nice way to say you didn't bring any additional information to the table or even a excess of lucid thought. You initially ramble a touch about macroeconomics and some of EU's real laggards yet it seems the only real conclusion: rigid and controlled economies are failing, does not seem to actually help your point. To merely replace 'Portugal' with 'France' would be fairly accurate; for example.

Don't quite understand the point your making with devaluing currency, it seems a little thrown in there; also, last time I checked, Italy didn't have a dictatorial ownership of the EU's monetary policy.

Germany's shed a lot of jobs since last year, you may massage the numbers to expand the net to include the areas of growth, but the fact is they have shaved off many jobs this last quarter because Germany is still a largely one-show export economy which will always take a beating when anyone else -most especially America- stops buying. Which doesn't really help the idea Germany is 'independent' or structurally strong.

As for the entire question of 'trust?' I believe that such ideas of trust can be safely seen through the ways in which such can be best studied; namely, the currency and the US Treasury notes. Both of which are doing better, and are stronger then ever. Which really is two strong facts that tell us that A: people still trust the U.S. economy to continue to outperform most, if not all, of its contemporaries and B: they trust it enough to put their money there.

Why? You say because they haven't "realized" the weaknesses, that they are seized by a irrational exuberance? Is that because there's just tons of exuberance in the midst of a global depression? Or is it because when they're running away from just about everything, to jump on the dollar, is not because they know what they're doing but because they really like George Washington? And that they're all oblivious to this, except you - who knows the truth, from looking at Eurostat on your time off? Sorry, but no one here is buying that so many of those investors are just buying into a failure, and 'you know the truth.'

 

[Maximus Zeebra]

last post

Actually Germany hasnt shed any jobs the last years, unemployment has gone down from 8% to current 7.2%, up from 7.1% a month before.

And actually, the dollar vs Euro exchange rate explains a lot, the trust has been in the Euro all along, while the dollar has steadily declined, then started collapsing when the crisis emerged, but are now back at pre-crisis levels. But I would not be surprised if the Euro keep strengthening slowly against the dollar like it has the last half decade.

Unemployment in the US seems to be rising disastrously fast btw.