US is bankrupt
Written by Alfonso Elizondo
It doesn’t matter how much they may try to hide this state of bankruptcy - and that includes the costly, rigged apparatus of public officials that has managed the American state for more than 70 years, such as most of its economists, ( including its Winner of the Nobel Prize for Economics, Paul Krugman), who have declared that the US debt is not important because it is mostly owed to the State itself, added to the nonsense from the television clown who is its current president and who changes his ideas from one day to the next - none of it has managed to hide the terrible reality that the world's largest economy is totally bankrupt and this problem will explode at any moment and cause a huge problem for the whole world today.
According to William Engdahl, an expert advisor on geopolitics at Princeton University, indebted Americans households are the leading cause of the imminent US bankruptcy. This well-known economist says that in 2015 the average American household owed $129,579, of which $15,355 was on high interest rate credit cards. Although the Fed has a zero interest rate policy, it does not mean that other Visa card issuers such as Chase Manhattan won’t charge between 15% and 25% interest. So the total debt of the average consumer amounts to $11.91 billion which represents 70% of the national GDP.
The average US citizen has to borrow more every day because the cost of living has surpassed the growth of their income in the last 12 years, while revenue growth has barely increased by 26% since 2003. Medical costs rose by 51% and food and drink expenses were 37% higher over the same period of time. So the average American household pays a total of $6,658 annually in interest on the cost of his home, car, credit card debt, amounting to 9% of the average household income of $75,591 a year.
Engdahl says that this annual interest expense is creating a major problem for the Fed to regulate normalize interest rates, as this would mean the explosion of the $12 trillion consumer debt as well as the corporate debt.
Another alarming debt is college student loan debt, which was insignificant 25 years ago, because now they have to borrow money to fund their college education. And the total unpaid student loan debt stands at $1.2 trillion, which is lower than only mortgage debt. Currently about 40 million Americans have student loans and some 70% are left with this debt when they graduate.
Those who graduated in 2015 left college owing an average of $35,051 before earning their first salary, so one in four students have become delinquent or have stopped paying their debt. Another major problem with the US economy is that Wal-Mart, the world's largest retail corporation, is closing 154 of its superstores where they sell everything. In addition, in the last two years hundreds of super shopping malls have been abandoned, while many store chains such as J.C. Penney, Kmart, Sears and Radio Shack have closed thousands of stores and thousands of medium and large companies continue to file for bankruptcy.
In addition, there is the worst fall in oil prices in 13 years, and oil production, which used to generate hundreds of thousands of jobs, is now threatening to hit unsecured loans, which will sink many banks.
Finishing off the sinking of the US economy is the stupid agreement between Kerry and Saudi King Abdallah in 2014 when they tried to flood the world market with Saudi oil and unleash a monetary crisis on Russia. In the end, Arabs and Americans are the ones most affected, especially in the shale-oil industry, as they have sold hundreds of oil fields, eliminating more than 250,000 jobs, and have lost billions of dollars of capital investment and stock dividends.
As jobs in the oil and gas sector are disappearing, companies are going bankrupt and debts are flattening revenues. Engdahl says that the 5% unemployment figure reported by the Department of Labor is incorrect and that real unemployment is close to 25%.
Engdahl ends by saying that public debt is a fundamental factor in the survival of any national economy. And based on History, this factor has been the root cause of the ruin of many countries. Now it is threatening the US and it can explode at any time.
Addendum: Although all the nations of the West are trying to return to the past, it is obvious that this has never worked and that the future of all humanity lies in new technological, scientific and cultural ventures developed by young people who might manage to create a world without violence, without hate, and do away completely with the mythical notion that there are ideas that are timeless and perfect.