Pending collapse of the USA

Discussion in 'General Discussion' started by Tango3, Nov 23, 2009.

  1. Tango3

    Tango3 Aimless wanderer

    interesting article and comments:Doom du jour:

    The Pending Collapse Of The U.S.A.

    By Timothy V. Gatto
    November 20, 2009 "Information Clearing House" -- The truth that most people realize but can’t openly talk about is that America has seen better days and that the system of capitalism has long outlived its usefulness. The last part of that sentence, that capitalism has outlived its usefulness, is thoroughly the fault of the capitalists themselves.
    For many years now, transnational corporations have sent much of America’s manufacturing overseas in order to take advantage of low cost workers. About the only manufacturing this country does on a large scale is earth moving equipment (Caterpillar) and military equipment. Boeing, Northrop-Grumman, Raytheon, General Electric and firms like that are the major remnants of a once thriving industrial base that made America. Detroit is still trying to hang in there, but shortfalls in sales have left it up to the workers in these plants to take it on the chin as their pay and benefits get cut.
    The Dow is trying to make a comeback but the way I see it, much of the rise of “blue-chip” stocks is really more wishful thinking than serious thought. The stocks being sold on the backs of some of these companies are being bought on speculation that the market will go higher based on the rise of the GDP. The question that I would like to ask, is how far can the GDP go when 70% of the GDP is based on consumer spending? Where is consumer spending going to come from when realistically over 16% of the people in America aren’t working?
    In an essay, written by Richard Heinberg entitled “Should We Prop-up a Dying Economy” (19 October 2009), he argues that the economists and the people who follow physical science disagree sharply about where this economy is going. Peak Oil, whether it is present now or just years away, will mean that the economy will contract. The economists state that growth can happen in any environment, yet it is apparent that when oil prices spiked in 2008, the auto industry and the airline industry almost went belly-up. Shrinkage of energy means shrinkage in the economy, we have all been under the notion that we can borrow against a growing economy. The facts are that if the economy does not grow, there will be very little in the growth of capital to repay debts that are leveraged at an average of an average of 350% of debt to GDP ratio. Where will new capital come from?
    As the price of petroleum becomes higher, imported goods will become more expensive. When our government fails to repay our foreign creditors, or pays them back in hyper-inflated dollars, there will be no credit issued to this country. This can be a significant problem because we currently use 25% of the world’s oil supply and we buy that oil on credit. He says;
    “We have entered a new economic era in which the former rules no longer
    apply. Low interest rates and government spending no longer translate to
    incentives for borrowing and job production. Cheap energy won't appear
    just because there is demand for it. Substitutes for essential resources
    will in most cases not be found. Over all, the economy will continue to
    shrink in fits and starts until it can be maintained by the energy and
    material resources that Earth can supply on ongoing basis.”

    -more at --
  2. ghrit

    ghrit Bad company Administrator Founding Member

    I become skeptical whenever the opening line of any post says it can't be talked about openly. For some reason, that reduces the believability factor by about 100%. Maybe I'll google up this Gatto guy and see if he is linked to the Mafia (which pretty certainly wants to serve itself.)
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