What will happen once United States of America will go bust?

[mayya555]

With this level of debt and with this trouble our economy is in the question "will we go bust" turns into "when will we go bust".

What will happen then? I'm too scared to even try to predict.

 

[uscitizen]

The banks and corporations will own us.
The long term Republican goal?

 

[Screaming Eagle]

40 or 50 countries will face severe upheaval and disruption followed probably by their government being overturned or ceasing to function. Political and real famines will probably kill hundreds of millions, if not billions.

That's what I think will happen.

 

[Care4all]

We get downgraded in our credit rating, our existing debt and future debt will go up in price, with higher interest rates....

Does a government file bankruptcy, can they do such legally? If so, then what we owe others, will be diminished.

 

[Flopper]

With this level of debt and with this trouble our economy is in the question "will we go bust" turns into "when will we go bust".

What will happen then? I'm too scared to even try to predict.

It's not going to happen, at least not the way most people would envision it. Here is something you might not be aware of. 60% of the national debt is owed to the public, both here an abroad. The government owes 40% of debt to itself, via loans between agencies. So it's not like the bank is going foreclose. Remember the treasury can always create more money which of course causes another set of problems.

As the US debt rises as percent of GNP in relation to the debt of other nations, those who loan money to the government, mostly buyers of treasury bills will demand a higher rate of interest. This will force up interest rates which tends to depress business. Also foreign investors become concerned about the risk of investing in the US. This will cause the dollar to devalue making foreign goods more expensive. These two event will result in an increase in inflation plus a depressed business climate.

In short, the government never goes belly up, but the public suffers a decline in purchasing power of dollar and waves of recession. All which leads to a decline in our standard living.

 

[Soggy in NOLA]

It will all be blamed on Bush.

 

[uscitizen]

It will all be blamed on Bush.

Sadly that is the most brilliant post I have seen you make.

 

[Avatar4321]

Luckily if the United States goes bust, Federal power would revert back to the hands of the States and the people.

Now, if the States and the Federal government both collapse, we have some major problems.

 

[Vanquish]

Luckily if the United States goes bust, Federal power would revert back to the hands of the States and the people.

Now, if the States and the Federal government both collapse, we have some major problems.

Amazing job reverting back to emotional quackery and evading the rather lucid post made by Flopper. I guess when you start a thread and someone actually doesn't derail it...you have to take matters into your own hands?

 

[Maple]

With this level of debt and with this trouble our economy is in the question "will we go bust" turns into "when will we go bust".

What will happen then? I'm too scared to even try to predict.

A 3rd world country like Haiti where we live in shacks.

 

[Dont Taz Me Bro]

With this level of debt and with this trouble our economy is in the question "will we go bust" turns into "when will we go bust".

What will happen then? I'm too scared to even try to predict.

Hopefully people will finally have to start pulling their own weight again.

 

[Flopper]

It is not the total amount of the debt that is important. It is the amount of debt in relation to Gross National Product (GNP) when compared to other countries. Japan for example has a much higher debt ratio than we do now or probably will have in the foreseeable future. The recession that we have experience is worldwide and has forced many governments to pile on a lot of debt. However, if the debt does drag us down, we will most lightly suffer economic stagnation with rather high levels of employment and inflation resulting in reduction in the standard of living.

But the most lightly outcome is an increase in taxes. We would not need to wipe out the deficit just increase taxes enough to convince the world that we have decided to embark on a course of fiscal responsible.

 

[rightwinger]

Guess what?

The US is the wealthiest nation on earth

We are not going "bust"

 

[Avatar4321]

Luckily if the United States goes bust, Federal power would revert back to the hands of the States and the people.

Now, if the States and the Federal government both collapse, we have some major problems.

Amazing job reverting back to emotional quackery and evading the rather lucid post made by Flopper. I guess when you start a thread and someone actually doesn't derail it...you have to take matters into your own hands?

I wasnt responding to Flopper. I was responding to the original post. People tend to do that when responding to a thread.

How is it emotional quackery? All things must end. Even the Federal Government. It may be next year, it may be 2000 years from now. But at some point it will happen.

And if it did, the powers of the Federal Government would resort back to the states and to the people. Nothing emotional about it. That's how our system is set up.

 

[Avatar4321]

Guess what?

The US is the wealthiest nation on earth

We are not going "bust"

Im pretty sure Babylon said that at one point too.

 

[uptownlivin90]

With this level of debt and with this trouble our economy is in the question "will we go bust" turns into "when will we go bust".

What will happen then? I'm too scared to even try to predict.

We'll all move to Brazil!

 

[Dont Taz Me Bro]

Guess what?

The US is the wealthiest nation on earth

We are not going "bust"

The day will come when the piper has to be paid and if we don't drastically curtail our spending it will be an ugly day. We could go bust quite easily actually. All it would take is for China to recall their debt and/or refuse to buy anymore. We'd be bankrupt just like that. The only other option would be to massively print more money which would send us into hyperinflation and that would be just as bad, maybe worse. See Zimbabwe.

You sound like people I knew before 9-11 who said the USA would never get attacked on our own soil.

 

[Flopper]

If anyone managed their finances the way government manages it's finances they would certainly go bust. But the big difference between your finances and the government is:

1: The government can never run out money. Why? Because it can create as much as it needs. It usually does this by issuing an IOU to the federal reserve banks who issue the checks. If the government does not payoff these IOU's, they become part of the national debt.

2: The government has an unlimited line of credit. It can borrow as much as it wants. Of course it may have to offer a higher rate of interest.

3. The government never has to pay off it's debt and it never will. It rust refinances by issuing more treasury bills.

As you can see the government can't go bust. It can go on and on with this indefinitely. So who pays the piper? You and I do. Every man women and child in the US pays in the form of higher prices on everything we buy. Government refinancing puts pressure on interest rates. So we all pay more when we borrow money. High interest rates hurt business. The government is only party that's not hurt.

 

[mayya555]

Dont Taz Me Bro understands the danger and I fully agree with him that USA can and will bankrupt.

Flopper: please consider the inflation mechanism in your predictions. It's a fact that no one (even governments) can borrow infinite amount of money by printing it.

 

[Dont Taz Me Bro]

If anyone managed their finances the way government manages it's finances they would certainly go bust. But the big difference between your finances and the government is:

1: The government can never run out money. Why? Because it can create as much as it needs. It usually does this by issuing an IOU to the federal reserve banks who issue the checks. If the government does not payoff these IOU's, they become part of the national debt.

2: The government has an unlimited line of credit. It can borrow as much as it wants. Of course it may have to offer a higher rate of interest.

3. The government never has to pay off it's debt and it never will. It rust refinances by issuing more treasury bills.

As you can see the government can't go bust. It can go on and on with this indefinitely. So who pays the piper? You and I do. Every man women and child in the US pays in the form of higher prices on everything we buy. Government refinancing puts pressure on interest rates. So we all pay more when we borrow money. High interest rates hurt business. The government is only party that's not hurt.

You have just demonstrated conclusively that you don't know the first damn thing about economics or finance. Please stop offering an opinion on this topic lest you spread your stupidity among the masses.