Wednesday, July 2nd, 2008...11:06 am
Why America Wants You In Debt
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We all know that the American economy is weaker than it has been in years. Although the talk of a recession of epic proportions that will make the 1929 Depression look like a stroll in the park being a little premature, that doesn’t mean that things will be getting any easier any time soon.
With 32 million families in the US in debt, you’d think that America would be happy to help them wipe out their debt. This is definitely not the case. In fact, they want you in debt right now.
American consumers make up the majority of the economy, two thirds in fact. The American government, along with corporation spending, represents a further third. With the state of the economy being so dark and depressing at the minute, if it weren’t for consumers buying what they like when they like on their credit cards then the country would head into a recession.
Consumers generally have two main reactions when America faces economical difficulties. They either carry on regardless and continue to spend, or they batten down the hatches and save as much money as possible via budgeting. Although you might be tempted to put away your credit cards and check books, if you do so then the economy would be in serious trouble.
Although the level of debt is almost ridiculously high with the total being just under $3 trillion, this is a good thing for the American economy. The average debt is around $12,000 but it is continuing to rise. With high food, fuel and gas prices, more people have to rely on their credit cards to make it from day to day in one piece. This means they’re still spending. It also means that the economy is just about staying afloat. Without consumer spending, it would almost certainly go under. This is why America wants you in debt.
In normal circumstances, an increased level of consumer debt would put a massive strain on the American economy because interest rates and monthly payments would become a struggle after a while, but as interests rates have purposely been lowered and many have no other way of paying for goods this isn’t as much of an issue as it would otherwise be. With nothing left to lose, the American government is seriously relying on borrowing to weather the storm.
Believe it or not, the housing market is also helping the economy. Although there are more repossessions occurring today than in any previous year in living memory, investors are picking up those properties because house prices have lowered so much that now is the best possible time to invest. Any new mortgage contributes to the growth of the economy, or at least stops it from going completely under.
It’s really important that this borrowing continues, especially in the wake of an increased incidence of bankruptcy and the generally bleak economic outlook. If it ceased, we’d all be in a worse position and facing inflation levels that would decimate the country. Unless you’d be comfortabkle paying $500 for a loaf of bread, America wants… no, needs you in debt.
4 Comments
July 3rd, 2008 at 1:57 pm
I really, really hope this is meant sarcastically. Even though the point is true – the U.S. economy is reliant on over-consumption – we certainly shouldn’t be encouraging it. For a good piece on why we over-consume I recommend this article:
http://www.orionmagazine.org/index.php/articles/article/2962
Frankly, consumption based on desires has to stop. It is not sustainable. Yes, that’s going to hurt… but when you act so irresponsibly for so long, as we have in America, you have to pay the consequences.
July 3rd, 2008 at 7:53 pm
Basically he is saying that we are so screwed that it is better to charge ahead and run off the cliff then stop and take the hit from all our baggage.
What a wonderful world it is.
Don’t blame me, I voted for Ron Paul
September 3rd, 2008 at 9:10 pm
*ahem* I’m not saying this is gonna happen, but it certainly looks like everything’s on schedule for the 2010 merging of the economies of Canada/US/Mexico (formation of the American Union) and the introduction of Amero currency.
Kindof puts a different spin on Bush & Co (Rockefeller, et.al) and their running our country’s surplus into massive deficit, giving non-bid contracts to buddies, etc, etc….basically milking the dollar for every last bit of worth before abandoning it completely.
Scary times for America…hope enough people wake up and care enough to put an end to this (if we can, at this point).
August 21st, 2010 at 4:51 pm
thanks to the elitists and banksters… your money is worth far less than it ever was. America is worth more if it declaires bankruptcy at the moment.
When the minimum wage of 1970 is compared with the minimum of today and currency devaluation is calculated in… you realize that we were paid more for our work in 1970 than we are now. A penny is now worth .0001 of a cent. In reality, if America was not screwing with the world markets and forcing the American dollar as the world currency backing, you start to see the true value of the American dollar poke through the clouds. This is one reason for the depression we are in now, don’t fool yourself by calling it a recession.
Two large oil producing countries have started trading in Euro dollars vs American and this has taken away the fake value imposed on the dollar.
As more people refuse America money, products, and people around the world… the American dollar will continue to tank but so will the world economies because without a proper backing, their own currency looses value too.
It basically comes down to this… the world economy collapses all together and rebuilds together or we get ready for the worst world war instituted by the elitists that implemented the currency and refuse to give it up to retain their power. They do not care if we suffer because they are elitists… they consider themselves royalty and of royal blood lines. They inbreed with cousins to retain this… could be why they are all so messed up in their heads. They think they can float on our backs to survive the coming problems.
I would sooner drown and take them with me… if only they understood how far we are willing to go now… they would realize their plan is folly… they are killing themselves faster than anyone else.
Ignorance is bliss
The most important decision one can make in life is to make their own and only their own – Crob
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