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The US Going Bankrupt?

Discussion in 'General Investing Discussion' started by Chris C, 20th Nov, 2008.

  1. Chris C

    Chris C Well-Known Member

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    Amid this worldwide crisis a topic that seems to have been shelved by the media was the looming potential for the US to go bankrupt in the next few decades.

    I was just wondering what others on these forums thought about issue? Do you see it happening? if so when? what implication would it have for the world?

    I tend to lean on the side of at this stage the US becoming insolvent is just a matter of time, I'm tempted to say that once this financial crisis is over and the world start returning to normal sometime in 2010, renewed focus will be on the US to steady the decline in the US dollar and to make significant inroads to its massive Budget Deficits and National Debt.

    Though with that said I can't help but feel it would all be too little too late. Short of their economy finding a second wind and starting to grow at 5%+pa for the next 20 years, along with significant increases in tax rates, reducing pension entitlements, virtually scrapping medicare entitlements (ie if you can't afford medical treatment you don't get it) and potential employing a mandatory euthanasia policy for all citizen above the age of 75 that are no longer financially self sufficient... even if all these measure were taken things would still be looking grim in the long term.

    :eek:

    Not a rosey picture for the good old US of A.
     
  2. Billv

    Billv Getting there

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    Chris,

    The US have been running a budget deficit for many years.

    A large % of this is due to their military expenditure and that money is usually going straight into their military manufacturing industry which they wish to maintain.

    They have the ability to raise more money if they wanted to
    Taxes are very low so they have a lot of room to move.

    cheers
     
  3. crc_error

    crc_error The Rule of 72

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    BV, how long do you think a business will last running on debt which is out of control? You said that the US has been running on debt for years? I recall rock solid banks operating for 100 years plus close down due to debt...

    how long to you think the US government can keep on bailing out companies? As each company falls, people loose jobs, which in turn results in connected industries suffering. The car industry is the next one to fall, think about the effect this will have?

    How will they continue to maintain the debt interest with falling income (from tax payer)?
     
  4. Chris C

    Chris C Well-Known Member

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