I was watching the movie "trader" with Paul tudor jones a while ago and they had the same types of debt worries in 86 as we do now. (huge gov't debts ect.) The musical chairs have lasted quite a while since then and who knows maybe it will last a while longer. I'm not saying I believe this is sustainable, I'm just saying the music can play for a lot longer than people would think. The statistic that I keep in mind is the average life of fiat currency throughout history .... 40 years. Guess which year we are on since we came off gold standard? I think the music will stop within the next 10 years and the dollar will devalue catastrophically in about a two week period. I think a hyper inflationary induced depression is more likely since no one in office wants to be responsible for taking away the koolade.
What brought us out then was a resurgence in oil production, and figuring out how to raid the SS lock box for spend-now programs. Similarly, if we were to suddenly find a new source of cheap energy, we'd be off to the races again. As unlikely as that is, finding another lock box to raid is even less likely.
Thanks for the response , that makes sense. I was wondering what may have fueled us from then to now. I was just being born around that time so I didn't live through it and understand it.
A depression wouldnt be so bad. With 30% unemployment and poor people rioting in the streets of USA.. gang violence and more, taxes for the rich will be greatly increased to 70%+, just like in the last depression. Take that, rich people!
The funny part is that this time the musical chairs game lasted like double the time compared to 1930. Around 30 years already compared to 10-15 years. I bet the Depression will now be 2 times as worse. I forecast that things will get so bad, for example in China, the communist government will get overthrown.
The last depression fundamentally changed the USA from a frontier country to an organized country. Without the massive increase in federal control and centralized taxation and spending, it is extremely likely the country would have shattered into several pieces. There is no frontier to go to. There is no path "back". The US will not survive intact, IMO, without significantly increasing the societal burden of the wealthy. You can call them ordinary citizens, or a mob, ultimately, that's where the power is.