This is the last chapter in the Economic “E” of Crash Course 2.0.
Not a very sexy title, I know, but together demographics and a profound failure to maintain and/or invest in the future puts the US way behind the eight ball.
Both of these factors are going to be extraordinarily expensive over the coming years. Demographics because the US has already lost the ‘right’ pyramid shape of its population to support the Boomer retirees. Social security is completely wiped out by 2033 (but in reality already has zero money in it).
Infrastructure because it will require trillions and trillions of dollars to simply get it back up to acceptable standards.
Add these to the other expenses and a runaway final deficit and debt situation and all on its own, we can declare that the US monetary, financial and economic systems are unsustainable.
When they break down finally I cannot say. For many living in tents and campers the breakdown has lardy arrived. So I suppose “breakdown” means whatever you think it means. As a starting point, is it when 50% or more of the country cannot sustain itself economically? Is it when the money system completely breaks down as is happening in Venezuela and Argentina right now?
Regardless, that’s the path the US is on. So is Japan and most of Europe.
Flipping Over The Exponential Function, Just For Fun
Nobody but nerds is going to read this, right? What if, instead of doubling, we use “halving” function? (Yeah, I’m that person who always has to be different ?) OK I’ll take a shot. A person lives about three weeks without food - even just sitting around doing nothing, body wastes away until organs shut down. I never said this would be cheerful.
Now instead of no food, what if food is cut in half every day? Day 1 a half ration, day 2 quarter ration, and so on. After a week it’s 1/64th of a sandwich, but that’s better than nothing right? How much longer would the person survive compared to the “no food” scenario?
[think for a minute]
I have not tried this myself, but I think the answer is “about one more day.” Reason for this is the limit function. The limit for halving is 1, so all these partial meals will add up to one full meal, and I’m assuming that would delay the inevitable by one day. Is that the answer you got?
Personally as a Red Sox fan I’d rather starve to death than sit in Yankee Stadium for an hour.
My last month paycheck was for 11000 dollars… All i did was simple online work from comfort at home for 3-4 hours/day that I got from this agency I discovered over the internet and they paid me for it 95 bucks every hour……> https://www.pay.salary49.com
As Baby Boomers retire they will have to sell assets (stocks, bonds, real estate) to raise funds. I’m glad this was pointed out.
But the distribution of assets has most stocks held by the wealthiest among us. They won’t need to sell. This means there will be more selling than now but it won’t be as much as would be due to the wealthiest selling.
Also due to financial problems those who are able to work continue to work. They will work until they can’t, and then sell assets as necessary.
So the resulting downward pressure on assets over the next 10-15 years will be real but muted. I view it as a significant headwind against rising asset prices, but by itself I don’t think it portends a market crash as a sudden event.
Hitting the energy cliff looks more like an event-driven market crash Demographics are real and significant but very predictable and slow moving.
Assets left over can be inherited by their kids. Just to say that stuff doesn’t always have to be bought and sold.
There are plenty of people in middle age inheriting nice pots from their parents. Ironically, they are often the people who need it least, because they have money in their own right. Why? People don’t like to say this out loud, but intelligence often passes on. The old people who have plenty, weren’t always totally stupid, so they have kids who go into the law or whatever and earn plenty, so the inheritance is just the icing on top/upgrades the house from “very nice” to “OMFG nice”.
The Neocons of the Uniparty have chosen the later. As Michael Synder in his economic collapse blog website points out, the day of reckoning has already arrived. Tent cities, RV and Camper cities, people living in their cars parked in shopping centers because they can’t afford rent. Cars that on average cost what I would have paid for a 3/2 house in the 80’s. Home Depot is now selling micro homes for $45K that have a living space of 550 sq ft because homes are now out of reach for the average American.
It’s no longer uncommon to see vehicles from Detroit hitting $100K with dealers offering 10 year loans. TPTB have made many bad choices and now cheap energy to power the economy is a challenge. Where will the money come from to reinvest in the decaying infrastructure when people are living in their cars and not putting their money back into the economy?
Our predicament is like the snake eating its own tail.
My last month paycheck was for 11000 dollars… All i did was simple online work from comfort at home for 3-4 hours/day that I got from this agency I discovered over the internet and they paid me for it 95 bucks every hour……> https://www.pay.salary49.com
The ability to achieve stability at these chess online impressive frequencies unlocks the card’s true potential, providing smoother gameplay, higher frame rates, and improved visual quality.
Here in sunny New Zealand, the government collects around $3b/yr in fuel taxes, but only spends $500m on road maintenance. That’s about half what needs to be spent to maintain our roads. I’ve no idea where the rest of that money goes.
The government spends barely $500 million annually on road upkeep here in sunny New Zealand, where gasoline taxes generate about $3 billion annually. That is around half of what is required to keep our roads in good condition. Where the remaining funds are spent is a mystery to me. word hurdle