# Will there be a US economic collapse? **URL:** \ **Category:** Great Debates\ **Created:** [January 21, 2014, 2:46am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337 "2014-01-21T02:46:22Z")\ **Posts on this page:** 20\ **Page:** 4
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [January 28, 2014, 7:24pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/61 "2014-01-28T19:24:11Z")
Interest rates aren’t controlled by the amount of debt a country has; they’re controlled by the county’s central bank, assuming it has one (Greece does not). A county with a central bank can have whatever much debt it wants, and any interest rate it wants. The Fed, or any central bank, can buy however much debt it wants, up to and including all of it. The debt is a fake issue, used to maintain the status quo: income and asset inequality. “Oh no, we can have infrastructure or food stamps, because of the debt!!!” Of course, when it comes to fighting a war, we can have any amount of debt, because “We’re at war!” Which was “impossible” during the Great Depression. Thus, debt went to multiples of GDP, unemployment went 0 during WWII, “because we’re at war!!!”. Any country (China for example) can generate a trade surplus any time it wants, merely by printing its own currency and using it it purchase foreign assets, like bonds for example. The trade deficit is, again, another fake issue. ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [January 28, 2014, 7:35pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/62 "2014-01-28T19:35:36Z")
> [@sweat209](#): > > for past 20 years no president can fix the high unemployment problem. Is the unemployment problem something you expect presidents to fix all on their own? In any case, we have a long-term unemployment problem that no one will be able to solve. We are moving towards a jobless economy. Jobs, as a general matter, are going away and not coming back. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [January 28, 2014, 7:51pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/63 "2014-01-28T19:51:01Z")
> [@Acsenray](#): > > Is the unemployment problem something you expect presidents to fix all on their own? > > In any case, we have a long-term unemployment problem that no one will be able to solve. We are moving towards a jobless economy. Jobs, as a general matter, are going away and not coming back. Really? So people don’t need things like houses, and food, and clothes, and haircuts, and furniture, and iPads, and laptops anymore? Anyway, a jobless economy is not an economy: it’s just a bunch of people starving to death. ---
**Author:** ![chrisk](https://avatars.discourse-cdn.com/v4/letter/c/6de8d8/32.png) [@chrisk](https://boards.straightdope.com/u/chrisk)\ **Post date:** [January 28, 2014, 8:04pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/64 "2014-01-28T20:04:14Z")
> [@LinusK](#): > > Really? So people don’t need things like houses, and food, and clothes, and haircuts, and furniture, and iPads, and laptops anymore? > > Anyway, a jobless economy is not an economy: it’s just a bunch of people starving to death. That assumes a job is the only possible source of income. I think **Acsenray** may be suggesting that the old paradigm of employment-based income is going to transition to something else; people generating income themselves? (What we used to call self-employment to fit it into the old paradigm :D) ---
**Author:** ![Acsenray](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/acsenray/32/4519_2.png) [@Acsenray](https://boards.straightdope.com/u/Acsenray)\ **Post date:** [January 28, 2014, 8:14pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/65 "2014-01-28T20:14:00Z")
> [@LinusK](#): > > Really? So people don’t need things like houses, and food, and clothes, and haircuts, and furniture, and iPads, and laptops anymore? There will be a relatively small proportion of things that will be done by humans, but largely, we are all going to be replaced by robots and computers, even those of us in white-collar professions. Manufacturers and service providers will no longer need employees to make their goods and provide their services. Other kinds of jobs (like journalism and entertainment and other creative or information services) are going to be done by hobbyists and volunteers, at least for some time. They’ll also be largely replaced by machines too. Labor is losing its value. It’s inevitable. And, yes, this means that unless we come up with a completely new way of organizing society, it’s going to fall apart. Manufacturers and service providers will still need people to buy their goods and services, but their clientele won’t have jobs to give them the income to do it. What happens next? Answering that question is going to be a difficult one, but we need to start looking for answers, and sooner than we might hope. But the problem remains. Jobs are becoming obsolete. They won’t come back. So how will the economy work? ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [January 28, 2014, 9:15pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/66 "2014-01-28T21:15:30Z")
> [@Acsenray](#): > > There will be a relatively small proportion of things that will be done by humans, but largely, we are all going to be replaced by robots and computers, even those of us in white-collar professions. Manufacturers and service providers will no longer need employees to make their goods and provide their services. Other kinds of jobs (like journalism and entertainment and other creative or information services) are going to be done by hobbyists and volunteers, at least for some time. They’ll also be largely replaced by machines too. > > Labor is losing its value. It’s inevitable. And, yes, this means that unless we come up with a completely new way of organizing society, it’s going to fall apart. Manufacturers and service providers will still need people to buy their goods and services, but their clientele won’t have jobs to give them the income to do it. What happens next? Answering that question is going to be a difficult one, but we need to start looking for answers, and sooner than we might hope. > > But the problem remains. Jobs are becoming obsolete. They won’t come back. So how will the economy work? Well, ideally, the purpose of an economy is to produce as much as possible with as little work as possible. So, I’d propose giving everyone $1000 a month, so they can afford to purchase all the stuff all those machines are going to be churning out. All that extra money is going to produce a lot of demand for things like pedicures and landscaping and people to write code for new apps and teachers for people who want to go to school. So then people who want to work, and get $1000 a month, can work and get a $1000 a month too. ---
**Author:** ![Mr.Nylock](https://avatars.discourse-cdn.com/v4/letter/m/77aa72/32.png) [@Mr.Nylock](https://boards.straightdope.com/u/Mr.Nylock)\ **Post date:** [January 28, 2014, 9:23pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/67 "2014-01-28T21:23:22Z")
> [@LinusK](#): > > Well, ideally, the purpose of an economy is to produce as much as possible with as little work as possible. So, I’d propose giving everyone $1000 a month, so they can afford to purchase all the stuff all those machines are going to be churning out. All that extra money is going to produce a lot of demand for things like pedicures and landscaping and people to write code for new apps and teachers for people who want to go to school. So then people who want to work, and get $1000 a month, can work and get a $1000 a month too. Are you familiar with the UAE? Emirates (born citizens of UAE) do not have to work, they can live comfortably off of government payments. I think the US does something like this in Alaska also. ---
**Author:** ![ElvisL1ves](https://avatars.discourse-cdn.com/v4/letter/e/5daacb/32.png) [@ElvisL1ves](https://boards.straightdope.com/u/ElvisL1ves)\ **Post date:** [January 28, 2014, 9:25pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/68 "2014-01-28T21:25:36Z")
The Alaska Permanent Resident Fund is only worth $1000 a year or so (it varies). More if you count the income tax they don’t have to pay on account of having oil, though. But you have to live there a year, including through a winter, to qualify for it. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [January 28, 2014, 10:11pm UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/69 "2014-01-28T22:11:26Z")
The thousand a month would financed through bonds purchased directly or indirectly by the Fed. So there’s no need for oil revenue to finance it. ---
**Author:** ![Stringbean](https://avatars.discourse-cdn.com/v4/letter/s/d6d6ee/32.png) [@Stringbean](https://boards.straightdope.com/u/Stringbean)\ **Post date:** [January 29, 2014, 12:01am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/70 "2014-01-29T00:01:23Z")
The American economy will only collapse for the same reasons the Soviet economy collapsed: Excessive government intervention. Study your history and the future is more clear. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [January 29, 2014, 12:29am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/71 "2014-01-29T00:29:33Z")
> [@Stringbean](#): > > The American economy will only collapse for the same reasons the Soviet economy collapsed: > > Excessive government intervention. > > Study your history and the future is more clear. One of these things is not like the other. There is a vast gulf of difference between the way the Soviet Union managed it’s economy and the way the US operates its. To imply they are anything alike is mind numbingly ignorant. I suspect it’s also an ideological based ignorance as well. ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [January 29, 2014, 12:43am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/72 "2014-01-29T00:43:07Z")
> [@WillFarnaby](#): > > Well it is inflation. Is inflation defined only as an increase in the price of bread? No, but when using the term, it generally helps to use the measure people normally use when talking about it in economics. Or at the very least to define what the term means clearly and concisely. But of course, if you’re referring to just a handful of cases, especially cases not typically used as definitive measures of inflation, it’s not the most reasonable thing to say “inflation”. > [@](#): > > So we can consume our way to prosperity? Nah. Future increases in the standard of living are secured by saving in the present. As previously pointed out, economics seems to imply quite heavily that yes, we _do_ consume our way to prosperity! On an individual level, this is senseless, but we’re talking about macroeconomics. If everyone saves and few spend, the result is lower consumption, leading to less aggregate demand and thus less need for workers. This is essentially macroeconomics _101_. > [@Honesty](#): > > Look at your Wikipedia link and click on the “Gross governmental debt as % of GDP”. Why should I? Do you even know what the term means? Gross governmental debt [completely ignores financial assets the country may have](http://fatasmihov.blogspot.de/2010/03/gross-debt-net-debt-and-future-debt.html). Things like the government debt owned by social security are counted, even though it’s money we owe ourselves. Thus the far more useful figure when talking about US government debt is _net_ debt, which does take such things into account. > [@](#): > > The U.S is in the top 11 and is between Cape Verde and Singapore. What you’re not mentioning is the increasing \>$600 billion dollar deficit is burning a hole in the U.S budget. Yes, because it doesn’t seem to be making a huge difference, and there are no good models that would point out _why_ it would make a difference. > [@](#): > > You’re not mentioning that investors will demand higher interest rates as our deficit barrels toward our annual GDP. Really? Because right now, interest rates _suck!_ [Around 2% total interest](http://www.treasurydirect.gov/govt/charts/charts_expense.htm). Calculate on inflation, and you’re looking at a .5% return on investment. And yet, people are still buying our bonds. There’s no lack of people wanting to buy up US debt. Not that people haven’t been predicting a spike in interest rates for years, but all that’s happened is that they’ve become less and less credible. > [@](#): > > You’re also not mentioning that we’re experiencing the highest peacetime deficit in the history of the United States. So what? Almost all of this deficit comes down to one factor: the economy sucks. ---
**Author:** ![Budget\_Player\_Cadet](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/budget_player_cadet/32/205_2.png) [@Budget\_Player\_Cadet](https://boards.straightdope.com/u/Budget_Player_Cadet)\ **Post date:** [January 29, 2014, 12:44am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/73 "2014-01-29T00:44:41Z")
> [@Stringbean](#): > > The American economy will only collapse for the same reasons the Soviet economy collapsed: > > Excessive government intervention. > > Study your history and the future is more clear. What, you mean instituting a completely planned economy? And alienating itself from most of the rest of the world, blocking any and all free trade? Yeah, that _totally_ seems like the way the USA is going. :rolleyes: Look, if you honestly believe that the US economy now is _anything_ like the USSR economy then, then you have nothing constructive to add to this discussion, and I strongly recommend learning something about the subject _before_ posting. ---
**Author:** ![arielburns](https://avatars.discourse-cdn.com/v4/letter/a/6de8d8/32.png) [@arielburns](https://boards.straightdope.com/u/arielburns)\ **Post date:** [January 29, 2014, 1:22am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/74 "2014-01-29T01:22:29Z")
> [@Gateway](#): > > We are inflating our currency with our central bank. As I understand it the main thing keeping us afloat is the fact that other countries are backed by the US dollar (originally because the US dollar was very solid due to lack of inflation if I am not mistaken). > > In any case, if the other countries are seeing that the US dollar is a bad currency to base their money on, they will likely move to another currency (?). If this happens will not the american economy collapse? > > What do you think the likelyhood of this happening is, and what are the signs to watch out for? If it happens what advice do you have (where to move, what actions to take, etc.) I may be a bit of a pessimist but if this happens I don’t think there’d be any moving anywhere. I hate not being able to cite sources in making an argument but I’m going to anyway. In the event of an economic collapse, in which the wheels of the system come to a complete and grinding halt, it would take literally weeks for humans to consume the resources they need just for basic survival. I’m talking all the animals, even tree bark. The amount of kilocalories we consume is no joke. We have resorted to farming in ways that resemble no natural ecosystem - we simply could not sustain life at that point and we would see a massive event that would end in most of the population dying from either violence or starvation. The apocalyptic movie ‘The Road’ has an erie landscape that I find likely to happen if the dollar collapses. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [January 29, 2014, 1:27am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/75 "2014-01-29T01:27:23Z")
Except there are virtually no circumstances under which that could happen other than a continent wide environmental disaster that prevents us from farming for one or more years. At a very minimum, we produce enough oil and we have enough people and organization that the government would ensure that farmers got the fuel they needed, grew the food the people needed and got it distributed so we could eat. There is NO ‘economic collapse’ that could prevent that from happening. ---
**Author:** ![arielburns](https://avatars.discourse-cdn.com/v4/letter/a/6de8d8/32.png) [@arielburns](https://boards.straightdope.com/u/arielburns)\ **Post date:** [January 29, 2014, 1:28am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/76 "2014-01-29T01:28:31Z")
> [@Acsenray](#): > > Is the unemployment problem something you expect presidents to fix all on their own? > > In any case, we have a long-term unemployment problem that no one will be able to solve. We are moving towards a jobless economy. Jobs, as a general matter, are going away and not coming back. So, so true. I’m actually really surprised by the amount of people who are optimistic about the future right now. The economy is not my niche, but human nature is, it seems that people will be facing the prospect of having children as a privileged luxury. I know many young couples that are stopping at one child because of the cost of living. Not necessarily a bad thing, but this may be one of the ways this all works itself out, if that’s possible. ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [January 29, 2014, 1:32am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/77 "2014-01-29T01:32:32Z")
Nope, more bullshit. Jobs go away, new jobs are created. There are always cycles in employment, and right now we’ve been stuck in a long term low. But it will change, and in another 5-10 years we’ll be in another boom period and all this cynicism and pessimism will been seen in retrospect as exactly what it is. ---
**Author:** ![arielburns](https://avatars.discourse-cdn.com/v4/letter/a/6de8d8/32.png) [@arielburns](https://boards.straightdope.com/u/arielburns)\ **Post date:** [January 29, 2014, 1:40am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/78 "2014-01-29T01:40:34Z")
> [@Chimera](#): > > Except there are virtually no circumstances under which that could happen other than a continent wide environmental disaster that prevents us from farming for one or more years. > > At a very minimum, we produce enough oil and we have enough people and organization that the government would ensure that farmers got the fuel they needed, grew the food the people needed and got it distributed so we could eat. > > There is NO ‘economic collapse’ that could prevent that from happening. When someone thinks about last ditch efforts such as moving, cashing in, grabbing guns, hiding out in bunkers, I always paint their worst picture for them. It would take people to stay calm, stay invested, stay focused on surviving with their communities intact, to ensure survival in a major event. No one is going to outwit the rest of society and survive - we do this together or not. In the most likely case, some people would run and weaken the efforts, and some would boldly stay and succeed to a certain degree. It wouldn’t be without losses, but it wouldn’t also be cataclysmic. ---
**Author:** ![arielburns](https://avatars.discourse-cdn.com/v4/letter/a/6de8d8/32.png) [@arielburns](https://boards.straightdope.com/u/arielburns)\ **Post date:** [January 29, 2014, 1:45am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/79 "2014-01-29T01:45:10Z")
> [@Chimera](#): > > Nope, more bullshit. Jobs go away, new jobs are created. There are always cycles in employment, and right now we’ve been stuck in a long term low. But it will change, and in another 5-10 years we’ll be in another boom period and all this cynicism and pessimism will been seen in retrospect as exactly what it is. That’s awesome news. It’s hard for me because of the losses I’ve had in the past decade due to unemployment. That’s not bullshit, just being beaten down emotionally by those consequences - it really never seems to end. I truly hope we do see another boom period. Seems like a long ways away though, gah… ---
**Author:** ![Chimera](https://avatars.discourse-cdn.com/v4/letter/c/8e8cbc/32.png) [@Chimera](https://boards.straightdope.com/u/Chimera)\ **Post date:** [January 29, 2014, 1:46am UTC](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337/80 "2014-01-29T01:46:07Z")
The whole ‘Guns and Bunkers, survivalist gangs’ thing can only be predicated on the loss of the vast majority of American lives. A nuclear war or a devastating plague. It cannot happen when there are 320+ million Americans living in intact cities and infrastructure. So given the limited (and unlikely circumstances), what are the odds of any of these ‘survivalists’ living through a plague that kills off 95% of the world? Fuck, if I lived through it, I wouldn’t need to have a bunker full of guns, food and ammunition. They’d be lying around for the taking. [Previous page](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337.md?page=3) [Next page](https://boards.straightdope.com/t/will-there-be-a-us-economic-collapse/679337.md?page=5)