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Townhall...
5 Things That Will
Happen To You When America Goes Bankrupt
By John Hawkins
“Madness is rare in individuals - but in groups, parties, nations, and
ages it is the rule.” -- Friedrich Nietzsche
Does it seem too strong to call the way America deals with its debt
“madness?” If not madness, then what? Denial? An addiction? However you
phrase it, we’re a country that’s in deep trouble, but so many of us
seem unable to deal with it.
Liberals in this country, for the most part, will admit that we’re
running up “unsustainable” deficits. Yet, these same liberals adamantly
oppose any and all serious efforts to do anything about it. Once you
move out from liberals to the general public, once again you’ll find
plenty of people who admit that this nation has a huge problem. Yet,
when you leave generalities, get down to specifics, and start looking
for programs to cut, then suddenly everyone gets nervous and says,
“never mind.” It’s like the old saying, “Everyone wants to go to
heaven, but no one wants to die.”
Sadly, this is a natural outgrowth of ladling out public funds to
special interests. There is so much collective money that few people
feel or appreciate it when even billions are saved. Yet, if we yank
even a few million away from special interest groups like PBS, Planned
Parenthood, or the unions, they squeal like pigs that are about to
accidentally be put in the wolves’ pen at the zoo.
In the face of that, people have to realize that this country is on
pace to go bankrupt -- and it could happen relatively soon if we don’t
start taking serious steps to control our spending. Mike Pence thinks
we could just be ten to fifteen years away. Tom Coburn is less
optimistic and thinks it could happen in as little as five years. If
that happens, we’re not a tiny country like Greece -- we’re the biggest
economy in the world. That means there’s no cavalry coming to pay our
bills for us because we ARE the cavalry.
What happens then? Well, we don’t know for sure, but we can make some
educated guesses about what COULD happen and how it will impact YOUR
life.
1) Your life savings could be reduced to nothing almost overnight.
Inflation is a fact of life. As Thomas Sowell has noted, “As of 1998, a
$100 bill would not buy as much as a $20 bill would buy in the 1960’s.”
That’s under normal circumstances.
However, the thing governments have traditionally done when they simply
can’t pay their debts is print more money. The problem with this is the
further you expand the money supply, the less the money you already
have on hand is worth. This can wipe out the savings of a lifetime in a
relatively short period. Imagine spending billions of dollars just to
buy a loaf of bread. Sound far-fetched? Well, guess what? That has
happened in the Weimar Republic, which was crushed under debts from WWI
and decided to pay it off by printing more money. It could happen here,
too, and all the money you’ve scrimped and saved could become worthless
in a short order.
2) Your taxes will skyrocket. We’ve been conned into thinking that we
can fund a massive government on the backs of the rich. This is simply
not so. It’s not working today and it’s not going to happen in the
future. We cannot tax the rich enough to pay off our debt or even
enough to keep the government going long-term. Even if we could, the
rich have the resources to flee the country for greener pastures if
they’re being taxed into oblivion. The middle class? Not so much.
What that means is the more desperate the government gets, the more the
average American is going to be hammered with new taxes. How much more
of your income can you afford to send overseas to pay China for the
money they’ve loaned us to keep PBS, Planned Parenthood, and the
National Endowment of the Arts going? What about if the country goes
bankrupt and your income tax rate shoots up fifty percent? How are you
going to pay your mortgage? How are you going to feed your kids? When
the government runs out of cash and it can’t borrow any more money,
then it will start leveling massive taxes on the American people.
3) Your life could be in danger. If the government goes bankrupt,
you’ll have an extremely angry, confused, and frustrated populace that
has little faith in its leaders -- combined with a horrific economy and
a reduced ability of the government to keep order. Under those
circumstances, widespread rioting and violent crime seem entirely
plausible.
When Argentina had its crisis, violence went up 142% and “young men
began looting supermarkets.”
Here’s some of what happened during the German hyperinflation of the
currency in Weimar Republic after it started printing money night and
day,
The flight from currency that had begun with the buying of diamonds,
gold, country houses, and antiques now extended to minor and almost
useless items -- bric-a-brac, soap, hairpins. The law-abiding country
crumbled into petty thievery. Copper pipes and brass armatures weren’t
safe. Gasoline was siphoned from cars. People bought things they didn’t
need and used them to barter -- a pair of shoes for a shirt, some
crockery for coffee. Berlin had a “witches’ Sabbath” atmosphere.
Prostitutes of both sexes roamed the streets. Cocaine was the
fashionable drug.
4) Your payments from the government will dramatically decrease or stop
altogether. Contrary to what some people believe, Medicare and Social
Security are paid out of the same fund that pays for everything else.
In other words, if the government goes bankrupt, there is no money set
aside to pay for these programs. So, if you’re receiving Social
Security, Medicare, welfare, food stamps, or any other similar
programs, those checks could stop or be slashed down to nothing. That
seems unthinkable to people, but if the government doesn’t have any
money, then it can’t pay it out to people. As they say, “You can’t get
blood out of a turnip.”
5) You will have a dramatically reduced standard of living. If taxes
and inflation escalate dramatically, both of which are very likely if
we go bankrupt, economic activity will slow to a crawl and we’ll go
into a depression. We’re not talking about a “This is the worst economy
since the Depression” situation that we hear every time there’s a mild
downturn in the economy; we’re talking about a REAL depression.
Businesses will close left and right, the stock market will tank,
unemployment will soar to heights not seen since the thirties, and the
government won’t be in a position to help very much.
If that happens in a country like America, where people have been so
prosperous for so long, it’s going to produce utter misery. It’s not a
lot of fun to be poor under the best of circumstances, but it’s much
worse to go from having a comfortable life with a bright future to
growing vegetables to eat in the backyard and wondering how you’re
going to keep warm in the winter.
Read the article with links at Townhall
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