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Will 2014 Be The Year Of All-Out Economic Collapse?

So here we are again, another Christmas season, another rampage of zombie-consumers, sleeping outside stores for $100 T.V.’s and the latest gadget that will most likely be obsolete by next Christmas. Everything is fine and dandy in the good ‘ol U.S.-of-A., right?

Well, maybe not so great, once you dive into the details -

Lets examine just a FEW of the issues going on at the moment (if we looked at them all this article would be a good bit longer) that may end up having disastrous effects on our economy within in the next year or so.

First of all, as most of you probably know by now, our national debt is the main problem that our economy needs to overcome, but at this point it seems that it has reached a point of no return, and a feedback loop may already have us in it death-grip (where now we simply can’t pay it down because we have to borrow more just to cover the interest payments, unless we want to stop sending checks to people who get them here and pay interest to other countries instead)We have been spending way more than we have been producing for several decades now, and at this point the debt is reaching astronomical levels.If you have ever wondered just how much our national debt is, you can track it on a daily basis right here at www.usdebtclock.org.

To be in too much debt may not seem like that dire of a circumstance, but the problem is that we are still racking up about a million dollars per minute, and we aren’t stopping this trend any time soon. With each passing day that the debt continues to rise, it’s looking more and more likely that there will be no escape, and it will eventually bankrupt our economy and possibly even bring the systems that we depend on for everyday survival to a screeching halt.

At the time of this writing, it currently stands at $17.25 trillion… yes, trillionwith a “T”. According to US Debt clock.org, that equates to more than $50,000 for every man, woman, and child, over $150,000 for every taxpayer, and a staggering $750,000 for each and every family at the moment.

Yes, this has been going on for quite sometime, as this article illustrates nicely, but recently it has reached the point of all out ridiculousness. Eventually, the debt reaches a “hockey stick” level where new debt has to be added to refinance the old debt so quickly, that the rate at which new debt is added increases exponentially. From the looks of the chart below, it seems as if we are getting very close to reaching that point.

US Debt Q3 2013

What’s interesting to note, as well, is that this chart doesn’t include Q4 of 2013, which after the debt ceiling was raised (actually temporarily suspended, which gave legislators a blank check to write as much new debt as they like until February 2014), congress spent $328 billion dollars in a single day. That will make the preceding chart look even worse.

But the debt isn’t so bad as long as you can afford the interest payments. But that’s the problem. Right now interest rates are starting to rise. Not so much that we are actually anywhere close to not being able to afford our interest payments. Right now we still are bringing roughly five and a half times what the interest on our debt costs us, but the problem is, if interest rates rise much more, we are just going to racking up that much more debt. At some point, other nations are going to start to realize that we are in an inflationary debt death-spiral, and we are eventually going to bring anybody that is holding our worthless fiat pieces of paper (or one’s and zero’s in most cases), down with us, to the bottom of the deep-blue.

And right now interest rates are still at historically significant lows. If they start creeping up at any reasonable pace, and get closer where they used to be just a decade or two ago (which is really where they belong) then our debt service is going to cost us much more than it does right now. And at what point are we going to have to start cutting benefits? Right now we’re spending over 1.5 Trillion dollars per year on Medicare and Medicaid alone. Do you think that the government is going to let us default on our debt before they stop sending your grandma a check? You’re dreaming. A default on US debt would be an absolutely nightmare scenario and they are going to avoid it at all costs. They will let every single retiree go homeless before they default on the US debt.

But the problem is that that won’t stop it, either. It will only drive us deeper into that feedback loop where more people would have to rely on public assistance of some sort, which would add even more to the debt, and the cycle will continue until the economy eventually collapses and all the debt is hyperinflated away.

But yet another problem is how the debt is actually reported. The United States Government likes to pull a sneaky trick where is doesn’t include some of its future expenses in it’s current debt – mainly medicare, medicaid, and social security. If any actual business or corporation did this it could possibly be charged with fraud. But the government gets to do it every day. If they did come to grips with the current situation and calculated the debt the way an actual business would, we would arrive at a mind-numbing 120 trillion dollars. This is due to the massive wave of baby boomers that are now starting to retire, and they’re collecting all the social security checks and medical treatments that have been promised to them. But the unfortunate reality is, that there is no way we are ever going to be able to pay all of them. We either have to cut back on the benefits drastically, or go into so much debt that eventually we cause hyperinflation and the whole system collapses and they stop getting their checks anyway. Not a very good scenario, is it?

If you want to see where all of this is most likely heading, just take a look at Europe.

Right now the economy in Europe is in shambles and things just seem to be getting worse by the day.

And even though our current unemployment level is supposedly sitting at 6.7%, but if the government hadn’t counted millions of people out of the workforce, it would actually be much higher than that.

In fact, if you look at the chart below of what percentage of people in the U.S. are actually in the workforce, it seems like we never even recovered from the economic crisis of 2008-2009.

employment population ratio

So 2014 is going to be an interesting year. Will the baby boomers put enough of a strain on our economy to finally give it a knockout blow? Will interest rates rise to where we have to start cutting benefits significantly? Are the unemployment levels going to keep getting worse? Or are these things blown out of proportion, and is it possible that 2014 might be a year for recovery?

Your thoughts and opinions are appreciated.

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  • http://none Marie Rottschaefer

    3-11-14 I have been working on my ‘people and planet’ project for about 40 years. The planet is so depleted that a resource-based economy will take creativity and hard work. For example, there is the issue of growing crops in a ‘climate change’ environment. Vegetation evolved in a different climate. Even seed banks can be as useful as the soil and environment they are placed in. Here is a comment I sent recently to The Atlantic Cities. _Climate change makes it imperative that food and water are immediate priorities. Agricultural engineering and related subjects should be many students’ choice to go to a community college and begin a career. Building protective habitat from cold, heat, storms, drought, floods, pollution, predators, and working with groups already designing new systems for crops and other vegetation, domestic animals and wildlife protection is vital. Weird weather will be with us for eons. Taking care of life could then lead to rebuilding a depleted planet. No shortage of jobs here. The younger generations may simply have to step up and replace the older generations obsolete plans in a convincing way that brings necessary change._
    I wish you well. But it won’t be easy; nevertheless, it will be necessary.
    ___

  • http://none Marie Rottschaefer

    A mathematical model that provides a more effective basis for biodiversity conservation than existing frameworks has been developed by a researcher at the Hebrew University of Jerusalem.

    The complexity of ecological systems, expressed in the large variation in morphology, physiology and behavior of individuals of different species, individuals of the same species, or even the same individual in different environments, makes the understanding of the mechanisms affecting the diversity of ecological communities extremely difficult.
    As a consequence, most theories of biodiversity are either limited to a single mechanism, or rely on highly simplified and possibly unrealistic assumptions. Thus, after more than a century of intensive research on species diversity, the world still lacks a solid, theoretical foundation that can effectively guide decision makers.
    What enables different species to coexist in nature? Why do some areas, such as the tropics, host huge numbers of species, while others can accommodate only a few? How is climate change expected to affect the diversity of natural ecosystems? What level of habitat destruction can ecological communities suffer, and according to what rules should we design nature reserves?
    Taking into account that preserving biological diversity (biodiversity) is crucial for the health of the environment, answering such questions is now recognized as one of the greatest challenges for the 21st century.
    In his Ph.D. thesis in the Department of Evolution, Systematics and Ecology at the Hebrew University, Omri Allouche developed, under the supervision of Prof. Ronen Kadmon, a new theory of species diversity that attempts to provide a more effective basis for biodiversity conservation. The heart of the theory is a mathematical model that predicts the number of species expected in an ecological community from properties of the species (e.g., rates of birth, death, and migration) and the environment (e.g., resource availability, habitat loss, frequency of disturbances).
    The generality of the model and its flexibility make it a highly effective tool for guiding conservation managers and policy makers. Interestingly, analyses of the model provide novel insights that often differ from common notions of conservationists. For example, in contrast to the intuition that improving habitat quality (e.g. by resource enrichment) should promote biodiversity, Allouche’s theory predicts that resource enrichment can actually reduce biodiversity, a result supported by empirical studies.
    Another example is the response of ecological communities to habitat loss, which is recognized as the largest threat to biodiversity. Often the response of an ecosystem to mild habitat loss is used to forecast expected responses to large-scale habitat loss. The theory predicts that such forecasts may be misleading, and that ecological communities may show a sudden biodiversity collapse prior to some critical level of habitat loss.
    One aspect of particular importance for conservation planning is the prediction of biodiversity responses to global climate change. Most current models of biodiversity responses to climate change make the assumption that dispersal ability of species is unlimited. In his work — which has earned him a Barenholz Prize at the Hebrew University — Allouche shows that this assumption significantly reduces the predictive power of such models and can therefore lead to misleading conclusions.
    Allouche believes that his contributions can improve the ability of conservation managers and policy makers to assess potential risks to biodiversity, to efficiently design nature reserves, to effectively identify and protect endangered species, and thus, to better conserve the diversity of ecological communities.

    Story Source:
    The above story is based on materials provided by Hebrew University of Jerusalem. Note: Materials may be edited for content and length.

    Cite This Page:
    • MLA_APA_Chicago
    Hebrew University of Jerusalem. “New model provides more effective basis for biodiversity conservation.” ScienceDaily. ScienceDaily, 12 September 2010. .

    Share This

    While this is not yesterday’s news, it is encouraging news that world researchers are working on the science and mathematics of the serious ecological dilemma future people and planet inhabitants and the planet itself face. World cooperation hopefully will bring solution.

  • Marie S. Rottschaefer

    3-20-14 I send you news from great sources.
    Science Daily
    Climate change will reduce crop yields sooner than thought
    Date:
    March 16, 2014
    Source:
    University of Leeds
    Summary:
    “Global warming of only 2 degrees Celsius will be detrimental to
    crops in temperate and tropical regions, researchers have determined, with
    reduced yields from the 2030s onwards. In the study, the researchers created a
    new data set by combining and comparing results from 1,700 published
    assessments of the response that climate change will have on the yields of
    rice, maize and wheat. Due to increased interest in climate
    change research,

    the new study was able to create the largest dataset to date on crop
    responses.”
    “As more data have become available, we’ve seen a shift in
    consensus, telling us that the impacts of climate change in temperate regions
    will happen sooner rather than later,” said Professor Challinor.
    The researchers state that we will see, on average, an
    increasingly negative impact of climate change on crop yields from the 2030s
    onwards. The impact will be greatest in the second half of the century, when
    decreases of over 25% will become increasingly common.
    These statistics already account for minor adaptation techniques
    employed by farmers to mitigate the effects of climate change, such as small
    adjustments in the crop variety and planting date. Later in the century,
    greater agricultural transformations and innovations will be needed in order to
    safeguard crop yields for future generations.”

    Hopefully students will choose colleges where financial and economic considerations are effectively operating. Keep student debt as low as possible. Work awhile, study awhile if necessary. You are in large measure earth’s future.
    I don’t see a moneyless society as doable but we could at least keep it proportionate to the people and planet reality that we face.

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