Complete US Government Financial Collapse

[Nebor]

Originally posted by: BigJ

Originally posted by: Nebor

Originally posted by: BigJ
What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

Way off. The United States basically built today's world economy. We're the biggest producer by far. The collapse of the United States economy would be tantamount to the collapse of the entire world economy.

But the thing is, how big of an effect would the financial collapse of the US Government have on the US Economy. Enough so that it would completely collapse the US economy, which would then trigger a "dooms-day" scenario?

These are the types of questions I would like to get your opinions on.

Yes, if the government collapsed, the economy is screwed. Our money becomes worthless, no longer backed by the United States of America. Banks are no longer insured. Assets are no longer secured.

As to whether or not it would trigger a "dooms-day" scenario, you could only speculate.

Truthfully such a situation couldn't happen unless something massively unexpected happened (oops, turns out all the oil is gone today.) Otherwise, that's what we have economists for. They analyze the smallest changes in our economy and plan for the future, making minute adjustments along the way to ensure our country's future success.

 

[spidey07]

I believe so. But I'm not up on global economics.

But if you look at our GDP (I don't recall where it stands as a percentage of the world) and from your statement that would have to be negative or zero (otherwise the gubment would have money) that is what would cause the problem.

people need the goods we produce.

 

[JS80]

Originally posted by: Nebor

Originally posted by: JS80

Originally posted by: BigJ

Originally posted by: JS80

Originally posted by: BigJ

Originally posted by: So
Global economy would definitely crumble, the population of the US itself would probably be okay, and the administration would likely lose power, but the biggest result would probably be political and military chaos throughout the world. Asia would probably be hit the hardest, as the US would not be able to project its power to defend asia from chinese aggression, leading to bloody, bloody wars.

Now this is a start to what I was looking for.

Can you elaborate at all on your post? It was my opinion that the Asian and European economies would be hurt enormously, but in what ways would they be hurt?

How would the political climate of the world after the fallout affect the economies of the world?

In order for your original scenario to happen, the US economy must enter into deep recession, and GDP growth would have to be negative. In this case, all economies of the world would be negatively affected; Asia, Europe, South America, etc., all trade partners would see a drastic slowdown in their output and/or inventories would build up because orders from the US would decline or cease. If the economy continues down this route, businesses will start to default on their loans and go bankrupt. Financial institutions start to fail. Mind you this will not only be happening in the US but all over the world. World stock and debt markets will fail and world wealth will be erased.

At this point countries will start to point blame on each other (*ahem blame the US*) and probably start some kind of war. After that I can't really say what would happen.

Simply put, failure of the US economy would simultaneously lead to a failure in the world's economy.

Thank you.

What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

I certify, as a CPA licensed in the state of California, that your classmate is a douche.

I certify, as the gayest one here, that accountants can't state things about economics.

I was trained an economist. I started my career as a BLS Economist. :roll: Way to assume.

 

[JS80]

Originally posted by: BigJ

Originally posted by: Nebor

Originally posted by: BigJ
What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

Way off. The United States basically built today's world economy. We're the biggest producer by far. The collapse of the United States economy would be tantamount to the collapse of the entire world economy.

But the thing is, how big of an effect would the financial collapse of the US Government have on the US Economy. Enough so that it would completely collapse the US economy, which would then trigger a "dooms-day" scenario?

These are the types of questions I would like to get your opinions on.

I would think the US economy would have to fall first before the Federal government fails. Unless they do something like promise more entitlements than they can in reality afford to pay (oh wait....d'oh).

 

[Atheus]

Originally posted by: Nebor

Originally posted by: BigJ
What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

Way off. The United States basically built today's world economy. We're the biggest producer by far. The collapse of the United States economy would be tantamount to the collapse of the entire world economy.

You're probably way off too, I bet it's somewhere in between. Massive powers have collapsed many times in history and there's always another to take thier place. I don't think it would be that bad... We (rest of the world) would lose money from trade with the US of course, but the US has a tiny fraction of the world's population and there's plenty of others to trade with. Lots of people have US dollars and shares in US companies, but as soon as the values of those began to crumble everyone would pull out and put their money elsewhere.

Russia didn't take down the world economy when communism collapsed, and they must have been one of the richest countries at the time.

 

[Nebor]

Originally posted by: JS80

Originally posted by: Nebor

Originally posted by: JS80

Originally posted by: BigJ

Originally posted by: JS80

Originally posted by: BigJ

Originally posted by: So
Global economy would definitely crumble, the population of the US itself would probably be okay, and the administration would likely lose power, but the biggest result would probably be political and military chaos throughout the world. Asia would probably be hit the hardest, as the US would not be able to project its power to defend asia from chinese aggression, leading to bloody, bloody wars.

Now this is a start to what I was looking for.

Can you elaborate at all on your post? It was my opinion that the Asian and European economies would be hurt enormously, but in what ways would they be hurt?

How would the political climate of the world after the fallout affect the economies of the world?

In order for your original scenario to happen, the US economy must enter into deep recession, and GDP growth would have to be negative. In this case, all economies of the world would be negatively affected; Asia, Europe, South America, etc., all trade partners would see a drastic slowdown in their output and/or inventories would build up because orders from the US would decline or cease. If the economy continues down this route, businesses will start to default on their loans and go bankrupt. Financial institutions start to fail. Mind you this will not only be happening in the US but all over the world. World stock and debt markets will fail and world wealth will be erased.

At this point countries will start to point blame on each other (*ahem blame the US*) and probably start some kind of war. After that I can't really say what would happen.

Simply put, failure of the US economy would simultaneously lead to a failure in the world's economy.

Thank you.

What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

I certify, as a CPA licensed in the state of California, that your classmate is a douche.

I certify, as the gayest one here, that accountants can't state things about economics.

I was trained an economist. I started my career as a BLS Economist. :roll: Way to assume.

I fail to see where you derive any gay authority whatsoever.

 

[Nebor]

Originally posted by: Atheus

Originally posted by: Nebor

Originally posted by: BigJ
What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

Way off. The United States basically built today's world economy. We're the biggest producer by far. The collapse of the United States economy would be tantamount to the collapse of the entire world economy.

You're probably way off too, I bet it's somewhere in between. Massive powers have collapsed many times in history and there's always another to take thier place. I don't think it would be that bad... We (rest of the world) would lose money from trade with the US of course, but the US has a tiny fraction of the world's population and there's plenty of others to trade with. Lots of people have US dollars and shares in US companies, but as soon as the values of those began to crumble everyone would pull out and put their money elsewhere.

Russia didn't take down the world economy when communism collapsed, and they must have been one of the richest countries at the time.

America's intellectual and productive capacity wouldn't be easily replaced. We also produce some crazy portion of the world's food supply, don't forget about that.

The thing is, Russia didn't collapse. They restructured before they were totally fvcked. If they had actually let things continue to deteriorate the way they were going, then we might have seen missles flying about and such.

 

[JS80]

Originally posted by: Atheus

Originally posted by: Nebor

Originally posted by: BigJ
What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

Way off. The United States basically built today's world economy. We're the biggest producer by far. The collapse of the United States economy would be tantamount to the collapse of the entire world economy.

You're probably way off too, I bet it's somewhere in between. Massive powers have collapsed many times in history and there's always another to take thier place. I don't think it would be that bad... We (rest of the world) would lose money from trade with the US of course, but the US has a tiny fraction of the world's population and there's plenty of others to trade with. Lots of people have US dollars and shares in US companies, but as soon as the values of those began to crumble everyone would pull out and put their money elsewhere.

Russia didn't take down the world economy when communism collapsed, and they must have been one of the richest countries at the time.

Are you kidding? Russia was a closed off COMMUNIST economy that had just began to open it's doors. It ultimately failed because it could not make the transition fast enough to compete with the world economy.

A failure in the US economy will directly negatively affect world markets.

 

[OS]

A complete financial collapse of the US government/banking system would mean another world war.

 

[JS80]

Originally posted by: OS
A complete financial collapse of the US government/banking system would mean another world war.

Thanks for the added value to this thread.

 

[Atheus]

Originally posted by: JS80
Are you kidding? Russia was a closed off COMMUNIST economy that had just began to open it's doors. It ultimately failed because it could not make the transition fast enough to compete with the world economy.

A failure in the US economy will directly negatively affect world markets.

True, and we'd lose some food production, some great universities and research labs, and Google, Intel and AMD of course. But would places like Europe and Asia really collapse? The food production wouldn't disappear overnight and places in Africa and South America would hapily grow us food, and the people (the real assets) of companies and universities would presumably move overseas to work.

 

[Kelvrick]

Originally posted by: JS80

Originally posted by: Atheus

Originally posted by: Nebor

Originally posted by: BigJ
What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

Way off. The United States basically built today's world economy. We're the biggest producer by far. The collapse of the United States economy would be tantamount to the collapse of the entire world economy.

You're probably way off too, I bet it's somewhere in between. Massive powers have collapsed many times in history and there's always another to take thier place. I don't think it would be that bad... We (rest of the world) would lose money from trade with the US of course, but the US has a tiny fraction of the world's population and there's plenty of others to trade with. Lots of people have US dollars and shares in US companies, but as soon as the values of those began to crumble everyone would pull out and put their money elsewhere.

Russia didn't take down the world economy when communism collapsed, and they must have been one of the richest countries at the time.

Are you kidding? Russia was a closed off COMMUNIST economy that had just began to open it's doors. It ultimately failed because it could not make the transition fast enough to compete with the world economy.

A failure in the US economy will directly negatively affect world markets.

Yep. World powers have fallen before, but they always took out a lot of the surrounding areas with them, and brought chaos until another took over. Greece, rome (dark ages, big one), mongolian. Russia not as much because there were two competing world powers, and the US just capitalized on it. I'd say there would be a lot of wars breaking out, but probably between countries that were only holding back because of the US being there looking over things. Then, Europe will decide to become the United States of Europe and start projecting french power everywhere.

Thats just my opinion though from what I can pull from memory.

 

[BigJ]

bump

 

[AgaBoogaBoo]

I'd flock with all the other birds to the UK

 

[sandorski]

I suspect that before the US Government declared Bankruptcy, a Global Financial crisis would occur first pushing the US over the edge into Bankruptcy. As it is now the US is already leaning on Foreign Investment more than what most Investors would tolerate from other Economies. Mainly due to the US's unique position in the World Economy. If a crisis were severe enough, those pouring Investments into the US may not be able to continue, Investing mainly into their Home Countries in an attempt to prop up Domestic Economies instead.

The best policy would be one of decreasing US reliance on Foreign Capital. Any Policies based upon the assumption that Others will continue tolerating the US situation indefinitely are doomed to failure.

 

[iversonyin]

This scenario is very unlikely to happen. Japan and China will bail us out at all cost if U.S. economy...somehow...failed.

Why? Because they are the biggest U.S. debt holder. They don't want their money down the drain.

Again, we are very unlikely to default on our debt because of the modern sophistcation of U.S. financial system. We went thru loads of bank panics, one major depression and couple of recessions, and we are still here. (that said something about our system)

 

[sandorski]

Originally posted by: iversonyin
This scenario is very unlikely to happen. Japan and China will bail us out at all cost if U.S. economy...somehow...failed.

Why? Because they are the biggest U.S. debt holder. They don't want their money down the drain.

Again, we are very unlikely to default on our debt because of the modern sophistcation of U.S. financial system. We went thru loads of bank panics, one major depression and couple of recessions, and we are still here. (that said something about our system)

You're assuming that they will even care about that held Debt under every circumstance. China itself could simply use thhat Debt as a Weapon aggainst the US if they thought it was in their interest(perhaps not Economic interest, but Military/Political Interest). China should not be trusted with the Power to control your(assuming you are US citizen) fate. They are not an Ally, perhaps not an Enemy either, but given a growing competition between China and the US for vital Commodities like Oil, they could turn around and attempt to Crush the US by precipitating a US Economic meltdown. They'd take a hit for sure, but if successful they could turn the tables on the US and be the defacto Global Power if the US Economy in fact did collapse.

Japan is a reliable Ally, but under certain circumstances even it might not be able to help the US if it wanted to. Just checkout Japans Debt to see a Nation that would certainly already be begging the US for help as the US slipped into crisis.

 

[AccruedExpenditure]

This simply isn't possible...
But lets through that out... no one has gotten it right so far...

It doesn't mean that GDP growth has slowed to less than zero as previously suggested, it means pretty much that GDP IS ZERO. Or that the government abolishes all taxes and collects no revenue at all.

The outcome depends on which scenario we are looking at. OP, update and we can do some theorizing.

<--- International Trade Major, currently writing a thesis on a related topic.

 

[Buck Armstrong]

All the people who want us dead would whine like bitches for the aid money we never should've given to their ridiculous regimes in the first place.

 

[SampSon]

I have a gun and lots of ammo...

 

[JS80]

Originally posted by: sandorski
I suspect that before the US Government declared Bankruptcy, a Global Financial crisis would occur first pushing the US over the edge into Bankruptcy. As it is now the US is already leaning on Foreign Investment more than what most Investors would tolerate from other Economies. Mainly due to the US's unique position in the World Economy. If a crisis were severe enough, those pouring Investments into the US may not be able to continue, Investing mainly into their Home Countries in an attempt to prop up Domestic Economies instead.

The best policy would be one of decreasing US reliance on Foreign Capital. Any Policies based upon the assumption that Others will continue tolerating the US situation indefinitely are doomed to failure.

You should read up on Globalization.

 

[sandorski]

Originally posted by: JS80

Originally posted by: sandorski
I suspect that before the US Government declared Bankruptcy, a Global Financial crisis would occur first pushing the US over the edge into Bankruptcy. As it is now the US is already leaning on Foreign Investment more than what most Investors would tolerate from other Economies. Mainly due to the US's unique position in the World Economy. If a crisis were severe enough, those pouring Investments into the US may not be able to continue, Investing mainly into their Home Countries in an attempt to prop up Domestic Economies instead.

The best policy would be one of decreasing US reliance on Foreign Capital. Any Policies based upon the assumption that Others will continue tolerating the US situation indefinitely are doomed to failure.

You should read up on Globalization.

What about it? Assuming the US can't default under any circumstance is a sure way to gaurantee a Default.

 

[K1052]

It would make the Great Depression look like a cakewalk.

Though the physical gold and silver bullion I hold would skyrocket in value.

 

[AccruedExpenditure]

Originally posted by: JS80

Originally posted by: sandorski
I suspect that before the US Government declared Bankruptcy, a Global Financial crisis would occur first pushing the US over the edge into Bankruptcy. As it is now the US is already leaning on Foreign Investment more than what most Investors would tolerate from other Economies. Mainly due to the US's unique position in the World Economy. If a crisis were severe enough, those pouring Investments into the US may not be able to continue, Investing mainly into their Home Countries in an attempt to prop up Domestic Economies instead.

The best policy would be one of decreasing US reliance on Foreign Capital. Any Policies based upon the assumption that Others will continue tolerating the US situation indefinitely are doomed to failure.

You should read up on Macro-Economics.

Fixed... he's right in his diagnosis to the current climate, but incorrect in his prediction

 

[FallenHero]

Originally posted by: Kelvrick

Originally posted by: JS80

Originally posted by: Atheus

Originally posted by: Nebor

Originally posted by: BigJ
What this question was spurred by was a comment made in one of my classes by a student. He proposed that there would be a slight recession in the world economy, but that within 5 years, the global economy would return to a healthy state.

Way off. The United States basically built today's world economy. We're the biggest producer by far. The collapse of the United States economy would be tantamount to the collapse of the entire world economy.

You're probably way off too, I bet it's somewhere in between. Massive powers have collapsed many times in history and there's always another to take thier place. I don't think it would be that bad... We (rest of the world) would lose money from trade with the US of course, but the US has a tiny fraction of the world's population and there's plenty of others to trade with. Lots of people have US dollars and shares in US companies, but as soon as the values of those began to crumble everyone would pull out and put their money elsewhere.

Russia didn't take down the world economy when communism collapsed, and they must have been one of the richest countries at the time.

Are you kidding? Russia was a closed off COMMUNIST economy that had just began to open it's doors. It ultimately failed because it could not make the transition fast enough to compete with the world economy.

A failure in the US economy will directly negatively affect world markets.

Yep. World powers have fallen before, but they always took out a lot of the surrounding areas with them, and brought chaos until another took over. Greece, rome (dark ages, big one), mongolian. Russia not as much because there were two competing world powers, and the US just capitalized on it. I'd say there would be a lot of wars breaking out, but probably between countries that were only holding back because of the US being there looking over things. Then, Europe will decide to become the United States of Europe and start projecting french power everywhere.

Thats just my opinion though from what I can pull from memory.

I think many of you fail to realize that never before has a country, a single country, controlled such a vast empire of wealth, technology, military, and communications. Even the British Empire at its very height cannot compare with what the US has now. It is a fact, its not boosting our countries ego. The simple fact is, as it stands right now, the world is tied to the US economy. Either through US Banks, US Materials, or US Money, the world is tied to the US. Failure of the dollar (at the collapse of the economy) would be a failure of MANY countries money reserves. Once again I must state that no country has EVER been in that position beforehand.