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Kimberly Amadeo

10 Reasons Why the U.S. Economy Won't Collapse

By May 4, 2014

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us economy collapse

Frequently, I receive emails from readers and friends asking if the U.S. economy or the U.S. dollar are going to collapse. I don't know why they've suddenly become concerned. Not one of them sent me a similar email the week of September 17, 2008 when the U.S. economy almost DID collapse.

Things have gotten slower in 2014, but last year the U.S. economy is poised had one of its best years since 2007. The stock market set new records, housing prices were headed in the right direction, GDP was be in the healthy 2-3% growth zone. Although this year is a little shakier, that's a far cry from a collapse. Maybe all the gloom-and-doomers who make money by selling gold (which is dropping), guns and canned food -- not to mention their own books on how to survive -- are worried because things ARE ACTUALLY OK.

Anyway, here's 10 reasons why the U.S. economy, and the dollar, won't collapse:

  1. The U.S. debt, though high, won't cause a collapse. Unlike Greece, the U.S. prints its own money.
  2. The U.S. could possibly run a much higher debt to GDP ratio than it does now and still not face economic collapse.
  3. Obama Added to the Debt to get us out of recession, not send us toward collapse.
  4. The U.S. won't Default on Its Debt.
  5. China Isn't Selling Its Dollar Holdings.
  6. China and Japan won't cause a Dollar Collapse.
  7. The Dollar Is Slowly Declining, not collapsing.
  8. The dollar won't be replaced as the World's Global Currency.
  9. The Fed's Quantitative Easing program can't cause Hyperinflation.
  10. There are too many failsafe measures that will prevent a U.S. Economic Collapse.

What It Means to You

You may see videos from well-known celebrities such as Robert Kiyosaki, Glenn Beck or David Stockman urging you to prepare for the impending collapse. Before you run out to buy gold or canned goods, do two things : First, read all ten of the articles above, and the links within them. Second, stop worrying. There are far more important things for you to spend your energy on than something that is highly unlikely to happen.

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Comments

April 9, 2013 at 10:29 am
(1) Tim says:

These are non sequiturs of logical fallacy. You presuppose to understand what factors will determine the fate of our economy or capitalism or globalization. This is really nothing more than a rationalization with absolutely no provable science behind it.

The U.S. polity and military had a top 10 list as to why the Soviet Union wouldn’t fail either. No one was caught more off guard.

April 9, 2013 at 10:55 am
(2) David Marchant says:

Why cannot we get this type of very clear and logical analysis from the network news media and even fox news? It seems like they all want to sell fear mongering. Fox News does it the least but still does it. I appreciate reading the analysis found in this newsletter.

April 9, 2013 at 2:02 pm
(3) Dave says:

What is the amero?

April 9, 2013 at 2:14 pm
(4) useconomy says:

@Tim: Actually, the 10 Reasons are facts that disprove 10 common reasons I hear as to why the U.S. economy is going to collapse.

@Dave Marchant: Thanks for your comment!

@ Dave: The Amero is a concept to create a common currency for the NAFTA trading partners. For more, see The Amero Conspiracy.

Kimberly

April 11, 2013 at 5:05 am
(5) Jim Wygand says:

Kinberly,
You can add to your 10 reasons (all of which are correct by the way) the fact that US corporations are sitting on an estimated $6 trillion in cash. That’s 38% of US GDP! It is going to be invested once it becomes clear that the recovery is gaining ground (which it i s) and companies start bumping up against capacity constraints. I grant that we are in turbulent waters. The EU simply cannot get its act together, the ideological divide continues to plague US policymaking, and North Korea now threatens to destabilize Asia. However, it appears that both Democrats and Republicans appear to be emerging from their respective slumbers and I expect China to make an effort to rein in North Korea. The EU will probably continue to try to muddle through and that will be a bit of a drag on global growth. However, the US continues to move in halting fashion forward and persistently. For the first time I now see signs of sustainability on the economic growth horizon. The US economy is definitely not going to collapse and some analysts suggests that it might even lead a global recovery.
Best,
Jim

April 11, 2013 at 12:02 pm
(6) useconomy says:

Hi Jim,

Thanks for your insights. It’s great to get your confirmation of my opinion, since you are an expert on the global economy. I did leave out the 11th most important reasons, which is the cash that corporations are sitting on, as you pointed out. That’s why the Fed’s expansionary monetary policy has not led to inflation — it is trying to make up for the withdrawal of cash by the corporations.
When that cash returns to the markets, as it’s just starting to do, the Fed will reverse course and pull in cash to avoid inflation.
I am a strong believer that, long-term, the emerging markets like Brazil will lead the global economy. I’m frankly a bit surprised that the U.S. is in the lead right now, as you pointed out. However, I guess I of all people should never underestimate the factors that lead to America’s continuing power and strength. For more, see What Are the Six Forces Behind U.S. Economic Power?.
Kimberly

April 19, 2013 at 2:24 pm
(7) Carrie says:

It happened once and will again. Use your common sense. We can’t keep printing out money to pay debts. The payments we are making toward it each year, are only paying the “interest” and we are printing more dollars to make those payments. Something has to give. What if China says they want the $1.1 trillion we owe them? The world base currency is the US dollars. What if they say they won’t the US dollar? We can not buy a new currency, because no one will take dollars if China refuses it. We don’t produce hardly anything. We import more than export. Congress haven’t given us a balance budget, but they raised the debt ceiling. Why is that? Because they can’t balance a budget that has so much debt attached to it. Get real and educate yourself. Do your own research.

May 17, 2013 at 12:04 am
(8) Jared says:

This is absolutely the most retarded argument for why the economy won’t collapse I have ever heard. At least five of the ten reasons are opinions. And four of the other five are barely facts. Someone is clearly living in a fantasy lala land and reads way to many new age self help books.

May 17, 2013 at 10:03 am
(9) useconomy says:

Hi Jared,

Thanks for your humor, you made my day by assuming that my assertions are from reading too many new age self-help books. I’ve never heard that one before! I had to laugh out loud.

As to my points being mere opinion, I can see where you might think that if you just read the blog without clicking on the embedded hyperlinks within the points. If you did, you would see each point is supported by referenced facts. I just couldn’t explain all of them within a blog post.

Hi Carrie,
China won’t call in its loan because it has no reason to do so until it has another customer to replace the U.S. China’s #1 priority is to create a better quality of life for its own people so they won’t revolt. It has no motivation to ruin the U.S. economy. For more, see Is the Yuan Replacing the Dollar as the World’s Reserve Currency?

Kimberly

May 17, 2013 at 12:47 pm
(10) Jared says:

Maybe from your perspective things are looking better. I live in the real world though, and I still see very few job opportunities without prior experience, which can only be gained by being given a job. And the entry level jobs that are there are mostly with temporary work agencies or part time in retail or food service which are all low wage. Even my friends who have four year degrees have moved back in with their parents and are working low wage jobs, and now have student loans they cannot repay. So maybe the stock market is at record highs and gold has dropped, this however, means nothing to me or any of my peers.

May 17, 2013 at 2:35 pm
(11) useconomy says:

Hi Jared,

I personally know many people who are having trouble finding a good job. There are still too many people unemployed — 11.7 million to be exact. There’s too many people who have been unemployed for a long time. This makes it difficult to find a job the longer you’ve been you’ve been without. So, I apologize it I made it sound like we are living in Camelot.

On the other hand, the economy is stronger than it’s been since 2007. This is hopeful news, and means you and your friends shouldn’t give up. The About.com Guide to Job Searching has a wealth of practical information that I’ve found is real-world. It’s also important to get, not just a liberal arts degree, but practical training for areas that are growing, like health care. Here’s a link to the fastest growing career areas, and how to get them. http://careerplanning.about.com/od/exploringoccupations/a/fastgrowing_occ.htm

Good luck!
Kimberly

May 17, 2013 at 4:03 pm
(12) Jared says:

Health care! Why didn’t I think of that, I’ll have to tell my friends who just graduated with four year business degrees that they should go back to school to become nurses! I’m sure more debt is just what they are looking for. I know I’ve always wanted to be a nurse. Thanks Kim!

May 17, 2013 at 4:37 pm
(13) RYAN says:

LETS ALL GO BE DEBT SLAVES FOR THE REST OF OUR LIVES!!! COME ON JARED!!! Dont argue with the mis-informed sheep. Its not even worth it. GOOD LUCK ON YOUR BOOK. IM SURE IT WILL BE A BEST SELLER.

May 17, 2013 at 4:38 pm
(14) RYAN says:

GETTING BETTER THEY SAID HAHAHHAAHHAAHHAHAHAAHHAHAHAAHAHAHAHAHHAHAAHAHAHHAAHAHAHHAHAHAHAAHAHH

May 17, 2013 at 4:43 pm
(15) Ryan says:

GO BACK TO BED, THE ECONOMY IS JUST FINE

May 17, 2013 at 4:55 pm
(16) Jared says:

Yea! What hypocrisy is this, she gives the “gloom and doomers” crap for selling their books while she is selling her own book. What a bunch of malarkey. I’m outta here

May 18, 2013 at 2:01 pm
(17) Ted Vermillionson says:

ALL 10 of the articles the author links to are ALL written by her!

WAKE UP PEOPLE. REPENT ON YOUR KNEES BEFORE THE LORD GOD ALMIGHTY. JUDGMENT IS COMING QUICKLY. IF YOU DO NOT HAVE A PERSONAL RELATIONSHIP WITH JESUS CHRIST, YOU WILL DIE IN YOUR SIN. REPENT! STOP SINNING! TURN TO CHRIST FOR SALVATION!

June 19, 2013 at 7:48 pm
(18) Cam says:

Lol reading this joke of a blog made me sick… To the point of this reply.
You speak to a gentlemn with your nose high in the air. That unemployment is 11.7 mill, you are joking right?
You lack adding that people that run out of unemployment are kicked off it.
It does NOT mean those people off unemployment found jobs, it means that the current unemployment is those on it currently. Please give me your sources for myself to confirm, because you sound like you don’t know what you’re talking about. And I tell from here. Where you can talk like you know “Facts” when all you have is small talking points.
Live you life with your head in the sand, but remember the beast you serve will eat you too.

June 19, 2013 at 8:04 pm
(19) useconomy says:

Hi Cam,

The number of unemployed is now 11.8 million, as more people reenter the job market. I got it from the Bureau of Labor Statistics, which counts those without a job who are currently looking for work. As the economy improves, more people will resume looking for work and the number of unemployed may actually grow. Here’s the source

http://www.bls.gov/news.release/empsit.nr0.htm

Kimberly

July 7, 2013 at 2:20 am
(20) Willyb says:

Ok, so I read all 10 links. I don’t see any evidence that supports your conclusion that the dollar won’t collapse.

In fact, you admit that it is declining.
Isn’t that just another way I saying its collapsing in slow motion?

The point is that the dollar -is- losing its buying power relative to other currencies. Whether it happens fast or happens slow is open for debate. But who cares?

The dollar is collapsing. Whether it happens overnight or over the next ten years is irrelevant.

Anyone who cares about buying power, should make sure their retirement funds are not denominated in USD. In fact I would go further, and say at this time, retirement savings should not be allocated to fiat currencies. As the dollar declines/collapses, all the fiat currencies of the world will continue to fluctuate wildly against each other until an equilibrium is reached. (Waiting for the dust to settle)

I agree with buying gold, and silver.

July 7, 2013 at 2:41 am
(21) Willyb says:

You also neglected to factor into the equation, that the worlds natural resources are being depleted.

In the grand sceme of things the worlds entire economy is built on the fact that we as humans take things from the earth and use them.

Water, oil, trees, fish from the ocean, even honey bee colonies are collapsing and being depleted.

The CIA even has plans drawn up for the fact that wars will be fought over water in the next 30 years.
(Check it out on the CIA website)

So even if the American dollar does survive, and retains its buying power relative to other currencies, the cost of goods and services will still continue to rise.
At some point the rise in the cost of oil alone will destroy the American economy.
(Google this too)

The only true way to have the American dollar gain its buying power is by regaining confidence in it.
This IMO can only be done by paying down the debt.
Which is -not- happening.
(This information comes from one of your own links)

Personally I think the tint on your rise colored glasses is a wee bit to bright.

Cheers!

July 7, 2013 at 9:00 am
(22) useconomy says:

Hi Willyb,

You raise two great points. First, I do agree that the U.S. debt is creating a slow dollar decline. However, the impact of that versus a collapse is very different. If the dollar were to suddenly collapse, it would be a catastrophe. As you point out, Americans’ retirement savings would be wiped out.

But here’s something to keep in mind — the lower the dollar, the cheaper U.S. stocks, land and exports. Foreign investors will prop up the stock market, buy up real estate, and demand our exports. This will boost economic growth, creating more goods with fewer U.S.dollars chasing it. That should support the value of the dollar. Of course, that all depends on whether the government keeps overspending.

As for gold, I would wait until it drops below $1,000 an ounce. That’s it’s historical level.

Kimberly

July 7, 2013 at 9:05 am
(23) useconomy says:

Hi Willyb,

I completely agree with your point about the depletion of natural resources. This summer’s heat wave should convince everyone that global warming is not a myth! We’re overfishing, destroying species at an alarming rate, and just generally making a mess of this beautiful planet.

Over time, the value of the dollar will be the LEAST of our concerns. It’s easy to become a great and powerful country when you have a large land mass loaded with abundant natural resources. The true test is coming now — can we as a nation pull together to take a long-term view and be responsible stewards for future generations? Right now, it doesn’t look too good.

KImberly

July 7, 2013 at 9:11 am
(24) useconomy says:

One last thought — I don’t think the economy will collapse THIS YEAR. That’s why I wrote the post. After six years of warning about potential collapse when it really was happening, or could, it’s finally time to let people know the economy is back on it’s feet this year, and probably next several years as well. This is a good year to buy a house, invest in stocks, get a job.

Perhaps I should have titled the article “10 Reason Why the U.S. Economy Won’t Collapse This Year.”

Kimberly

July 7, 2013 at 12:25 pm
(25) Willtb says:

Okay. So we can agree that the dollar is declining relative to other dollars. And that the cost of all goods will continue to rise as the world depletes its resources.

Having foreigners buying property in the USA will prop up property values although if they do it with borrowed money it weakens the global financial system.

We need a world of savers not borrowers. Saving wealth strengthens the system, because savers have no chance of defaulting on payments (they pay with cash)

Are you happy to have foreigners buying the land in your country? I mean sure it props up the value, but what if the trend were to continue and foreigners owned -all- the property. Then you would have a flood of dollars exiting your country, same as the dollars that leave to Saudi Arabia for oil. So really, that’s a negative sign. Eventually American wil need to buy that property back. (It amounts to more debt!)

With the worlds natural resources being depleted rough times are coming, the cost of everything will start to rise.

Urbanization led to great advances in technology and manufacturing, but it also weakened the system. People now rely on food coming to grocery stores rather growing it themselves. That’s the opposite of diversification. In order to slow the cost of rising goods and also absorb And bubbles that -might- burst it can’t hurt to start growing some vegetables, and fruits. Simple things. And grow more than you even need as a family. (Over abundance is better than under abundance)

I would also want to own land rather than a townhouse, and be near a creek or some form fresh water.

These plans are admittly alarming. But based on the facts they sound pretty reasonable. These should be goals. I would work on them at a reasonable pace, I’m not saying to sell everything and flee. (Yet) :)

July 7, 2013 at 1:28 pm
(26) Willyb says:

I would also think that as more and more of the middle class earnings are forced to pay for food, shelter, and higher transportation costs, people will not be able to buy consumer things like cars, electronics , and non essentials. So the companies that build these non essential items will become more volatile and become more likely to collapse. So investing in these types of companies though stocks is not a good long term investment.

Jobs in government and healthcare while paying lower wages will have more security, because the government will do everything in its power to protect them.

As other people lose their jobs (and source of revenue) these jobs will be more and more valuable to have.

Gambling and liqueur will always be here, and in rough times the rich still spend money on them. Jobs and business linked to them will still have value.
(But the dollars going into them will be fewer as the middle class is forced out)

Grocery stores and drug stores will be stable, people always need food. Also good places to work.

I like the idea of gold as an investment. As the world fiat currencies are extremely volatile much of the world will looks for a stable place to put their wealth.

Nixon I believe is the president who removed the gold standard. He may have felt forced into it, but it removed a lot of stability from the system. It also amounted to creating more debt.

In a perfect world everyone would be self sustaining and has excess for sale. The fact that there are too many borrowers in relation to savers creates instability in the system which hurts the middles class and poor when bubbles bust, and shocks ripple through the system.
When large amounts of people default in debt the middle class feels most of the pain.

China is pushing its citizens to buy silver. This is going to solidify their economy as their citizens will be better able to absorb financial shocks. America or rather the entire world ought to do the same.

July 8, 2013 at 7:23 am
(27) Willyb says:

I think the real things we need to watch are:

If everyone prints money at the same time at the same speed then no ones dollar will depreciate. They are all still equal. All that happens is that the monetary supply has been increased. This can be a good thing to stimulate the world economy.

Bernanke has printed lots of money and put into banks to be held as reserves, and lent out -strictly- for the purpose of expanding the economy. As long as the banks use it solely for this purpose it shouldn’t create inflation.

But if the extra currency just gets spent on consumer spending then inflation will start and interest rates will have to be hiked which could cause the us government to default on its debt.

So we need to know how much debt load the us government can carry and at what interest rates they can carry it.

Simultaneously we also need to see the government itself create surpluses. On the one hand growing the economy will add stability by bringing in extra tax dollars. But on the other hand why not just bite the bullet and pay down the debt?

Therin lies the danger of fiat currencies. The government is always under pressure from all sides to spend more.

The other problem that -isn’t- foreseeable is that a bubble elsewhere in the world will pop and bring the USA down. Another reason why they should pay down the debt.

Obama has forced banks to tighten up their lending criteria. This adds stability by reducing bubbles from occurring. But isolating the country further would also help. Foreigners should not own property in the us with borrowed money. Beyond that I’m not sure what else can be done.

So in conclusion we need to see how these reserves that beenanke has put into these banks are used, and we need to see the us congress and the president work together to spend less on government itself.
Clinton actually shut the government down for a few days as I recall

Cheers.

July 9, 2013 at 10:09 am
(28) useconomy says:

I wish the true cost of overfishing, etc, was reflected in its price. Tuna and other valuable natural resources should be wildly expensive, if the true cost of depletion was counted into it. Water wouldn’t be free. The problem with global warming is that the we won’t pay the price until it is too late to do anything about it. It seems our society has a very short future view — until the next election.
If most people really understood the issues, as you do, then they would elect leaders who are doing something about it!
Kimberly

July 9, 2013 at 10:15 am
(29) useconomy says:

“So we need to know how much debt load the us government can carry and at what interest rates they can carry it.”

This is an excellent question. Japan can carry a 200% debt-to-GDP ratio, of course, most of it is owed to the people themselves, not foreigners.

Almost 1/3 of the U.S. debt is owed to government agencies, so they won’t be calling it in. For more, see Who Owns U.S. Debt?

Basically, any country can owe debt until the “tipping point.” That’s when the debt-holders get nervous. That sure hasn’t happened in the U.S. — yet!

Kimberly

July 11, 2013 at 2:09 pm
(30) Willyb says:

Okay, you’ve convinced me that the American Debt load isn’t nearly as bad as the public opinion says it is.

If we factor into the equation that 30% of the debt is internal (social security and so on) and that the government can reduce payouts or raise the age requirement for receiving old age security, then a dollar collapse actually does seem unlikely.

Coupled with the fact that the USA could become a net exporter of energy over the next decade due to natural gas fracking, this has the ability to significantly change the outlook on their debt.

So is buying usd denominated bonds like treasuries and the such, actually a -good- idea? Perhaps these are actually a great value. My outlook on buying gold would be completely flipped in such a scenario.

Looking at the value of gold over the last 100 years (Wikipedia) shows that the stock market has performed better than gold despite the crashes in the stock market.

But we still need to consider that natural resources are declining which will drive the cost of housing and food upwards. And oil and the products made from it will continue upwards. (Gasoline, plastics, and so on)

My investment strategy is a 30 year plan. I buy and hold.
What will be a good buy and hold subject the variables discussed here?

Will

July 11, 2013 at 5:12 pm
(31) Kimberly says:

Hi Will,

Actually, you only need to look at the price of gold since 1973, when Nixon took the dollar off the gold standard. Before that it was pretty much fixed.

http://useconomy.about.com/od/commoditiesmarketfaq/a/Gold-Price-History.htm

It’s always good to have some gold in your portfolio, because it’s a good protection against a stock market crash. For more, see

http://useconomy.about.com/od/commoditiesmarketfaq/f/why_invest_gold.htm

For the long-term investor, most financial planners will recommend a well-diversified portfolio. Research shows this will give the highest return for the lowest risk over time. Of course, you should always rebalance to make sure you stay at your asset allocation targets.

Kimberly

July 13, 2013 at 12:25 pm
(32) TrueLies says:

Tell me, does a gunshot wound leave a scar?

With that in mind, consider that our economy has been in one of the slowest recoveries in it’s history. The next generation of americans will have a much lower quality of life than their parents. Our economy will never “recover” – a new normal has been slowly molded in front of the public and as a result, this so-called recovery is nothing but false-hope.

The dollar will keep falling as it has for years now. You can thank the politicans that have no concern or simple knowledge of mathematics. Entitlement programs are unsustainable and way to expensive. Of course the elected officials wont do what’s right to keep us afloat beacuse we have one party that relies on a popualtion of people that depend on tax-payer money to survive and another party that want’s to keep taxes at a rate that won’t bring in enough revenue to sustain these programs that Americans love so dearly.

This country will collapse not as a result of China or some third party. But by the hypnotized average joe that thinks that as long as they get to keep there SSI, that the world is doin a-okay.

July 13, 2013 at 1:41 pm
(33) Tom says:

I like the back-peddling in comment #24. Even a child could see through that. And the first reason we won’t economically collapse-”we print our own money.” Are you kidding me??? That statement ALONE shows the willful ignorance or downright manipulation of the speaker. Why would you listen to anything someone had to say after making a statement like that?

July 14, 2013 at 10:03 pm
(34) Jared says:

Thank you Tom! HAHA!! And if the dollar collapsed tomorrow, she would probably say, ” What I meant was, why the economy won’t collapse until July 15th, 2013″. This woman is so full of it she is about to burst at the seems just like the economy. :)

August 8, 2013 at 3:52 pm
(35) Ryan says:

Are kidding …. It is 100% guaranteed that the dollar will collapse . All fiat currencies collapse . Do you people really think your going to get an honest answer from somebody who works for :

IAC (legal name: IAC/InterActiveCorp) is an American internet company with over 50 brands across 40 countries headquartered in New York City.The Chairman and Senior Executive is Barry Diller ,who was previously head of Paramount Pictures, Fox Broadcasting, and USA Broadcasting.

1. We print money – We are getting away with it – Ben Burnake
2. We could and we are going to
3.Added debt to get out of debt – do you know how the federal reserve works ? YOU NEVER GET OUT OF DEBT
4.Of Course we won’t default – print more money
5.China not selling- recently China said they have nowhere else to put it . So now we see “special economic zones” and the possible purchase of 50 square Idaho miles to Communist China
6. China and Japan won’t cause collapse – of course not ! We go down they go down
7. Dollar is declining not collapsing – Good word play
8.World Currency – it’s coming
9. Hyperinflation will be seen in America no doubt .
10.Measures in place – So is the constitution and we see how that has been upheld

August 9, 2013 at 9:16 am
(36) useconomy says:

Hi Ryan,

Unfortunately, Barry Diller has no idea what I write, since I’m so far down the chain of command. So, my opinions are my own. To your other points, we already do have a world currency — it’s the U.S. dollar. There’s no other currency in position to take its place. So, how can it collapse? What would replace it? As for hyperinflation, the Fed would have to print a lot more than it already has to create something at that level. History has shown that most hyperinflation was actually caused to pay for wars. For more, see Causes of Hyperinflation.

Kimbely

August 8, 2013 at 9:05 pm
(37) Jim says:

This is all nonsense on both sides. Our economy and way of life will definitely collapse and not for any of the presented reasons. It will collapse simply because its natural. The one thing nobody talks about is that no civilization has ever in history been able to keep a modern industrialized society going for long. The earth not to mention universe was created in a very scientific way that we call nature. The earth was created to be self sustaining within the scientific way designated by the creator. It must work in that way. It always has and always will. Read written works like “In defense of nature”. Most wont read scripture but maybe they will at least read that. We can’t escape what the earth was designed to do. It has an ecosystem that works on its own. Man made things do not. Man made things fall apart and dissolve back into the earth. So where does that leave an industrialized society. Simple. It leaves us will enormous maintenance that we cannot sustain. When you build a building you make money but from the instant you are done it is just a costly upkeep of maintence. Our highways and bridges and ulitility infrastructure is falling apart and there’s no money to maintain it. You want to know how to keep a modern society going? Only two ways. You either take your natural resources and make something from it and sell it to other people outside your country to bring in assets or you go out conquering other people and steal their assets. We do neither. We are not even as good as the Roman Empire which at least understood they had to keep expanding the empire with military to bring back the assets to keep running an infrastructure of concrete and paved streets and running water and people that didn’t really produce anything.

August 9, 2013 at 9:04 am
(38) useconomy says:

Hi Jim,
To your point, “You either take your natural resources and make something from it and sell it to other people outside your country to bring in assets or you go out conquering other people and steal their assets.” That was true until after World War II. We conquered the Native Americans and unified the country and lived on natural resources for a long time. See How Natural Resources Boost the U.S. Economy. After we won WWII, we lent Europe the money to buy our stuff to rebuild. Now we try to keep the dollar low so we can export to other nations.
However, exporting isn’t the answer either. The U.S. is still wealthier that the rest of the world, so until they improve their standard of living, they can only buy so much. Lately we’ve created things like the iPod which aren’t based on natural resources, but are based on innovation instead. Things to make life easier and more productive.
So, the answer is to rebuild the middle class by creating jobs and reducing unemployment. Instead, Congress wastes its time doing basically nothing. We could rebuild the infrastructure and create jobs if only Congress would shift funding from defense ($800 billion a year and creates drones not jobs) to public works. For more, see Job Creation.
Kimberly

August 8, 2013 at 9:09 pm
(39) Jim says:

The English did the same. We go out a throw away a trillion dollars on a war that we are not getting anything back on because we try to play nice guy and say it was to defeat evil. We did it to make sure gas stayed at $4 a gallon instead of $8. Big deal. A trillion to accomplish that??? If we are not going to conquer then we must produce and sell. We only send our money out to bring in worthless things that turn into garbage like toys and goods that deteriorate into nothing. Not a very good investment. Anyone knows a car is a horrible investment vehicle because you lose money the second you drive it off the lot. That is similar to how our nation acts with assets. Our economy is 70% based on consumer spending. That’s insane. It should be 20% with the other 80% being exports. That’s how you keep an industrialized nation running. 70%??? That means all Americans have to keep spending money to keep us afloat however people are spending less because they are running out of assets. Personal debt is at an all time high. No jobs to earn money and the government has all ready taxed the public to death. The author of this writing is clueless because she just looks at numbers but doesn’t understand basic science, math, and nature. We built a modern society but you need to bring in assets (money) from abroad to keep it running or else it falls apart. You can just consume and consume from yourselves. It’s robbing Peter to pay Paul. This whole economy is an illusion. The real unemployment number is over 30% the number given by Uncle Sam is just people collecting unemployment.

August 8, 2013 at 9:13 pm
(40) Jim says:

Most people unemployed are no longer eligible and most of the jobs lately have been part time. Here is your outlook for our future. Infrastructure failing with no money to fix it. No manufacturing as the rich corporate guys who really run our government sent the jobs overseas to get themselves rich and now they wonder why the Americans they left jobless can’t buy their products in an economy based 70% on consumer spending. The baby boomers being the largest segment moving into retirement which always means a draw on a society not an input into society. They will not produce anything but will require more assets from the taxable people thru social security, Medicare, and Medicaid. Many are on fixed incomes which means they are all just buying necessities. Who has a grandmother that shops daily? Nobody. They have the same furniture for the last 25 years of their life. We will slowly be returning to a more natural way of life away from modernization wether we like it or not. It’s natural. I gaurantee the Romans up until the German Mongols came running down out of the hills were still saying everything will be just fine. At least they were smart enough to make it over 900 years. We won’t even make 300. When rome collapsed they were the most modern nation in history. Then the dark ages where most of that technology was lost. The world did not get that advanced again for 1500 years. Modernization goes up and down. Get use to the fact we will slowly fall apart with the end coming like a flood and we will have at least 5 or 6 different nations here within the next 20 years and there will be way more farming and dirt roads and less computers. It’s an absolute certainty. Ask history.

August 9, 2013 at 9:10 am
(41) useconomy says:

Hi Jim,
Actually, I don’t think the Boomers will retire. Why? They can’t afford to. Unlike today’s seniors, who scrimped and saved and are used to living on a modest income, today’s Boomers won’t want to survive on Social Security alone. The average Boomer has only saved $60,000 toward retirement — that’s nowhere near enough to retire. As a result, I think they will keep working as long as possible. The ones who are suffering are the younger generation. Have you noticed most of the cashiers and baggers at grocery stores are older folks, not teenagers? That happened over the last 10 years, even before the recession.
However, you are right that they will still draw down Social Security and Medicare to supplement their lifestyle. Medicare will be the big cost, since most people continue to eat too much, drink and smoke their way to ill health. It will be interesting to see if Obamacare, which has already started to change how medicine is practiced, will affect this. But that’s a topic for another blog post!
Kimberly

August 8, 2013 at 9:14 pm
(42) Jim says:

I think I got it all in 3 posts lol

August 20, 2013 at 9:47 am
(43) john says:

I’ll make it simple. For one, most Americans fall into a category called
Normalcy Bias, that in itself sums up that the us economy is doing OK.
Now I’ll make it pithy, right now the US is the World Reserve Currency. That
in itself allows us to print money with out the backing of almost nothing.
The reason US is allowed is because of one thing called The Petro
Dollar. Research those three things I mentioned, Normalcy Bias, the US.
World Reserve Currency, and the most important The Petro Dollar, tie
the three together and come up with your own conclusion.

August 25, 2013 at 1:12 am
(44) JackTheRipper says:

I read the first couple lines of this article , and i instantly came to the conclusion that this woman is either living in some sort of fantasy land illusion or she is deeply in denial. So many factors that you mentioned in this article are incorrect , and very misleading. For example just to name one you stated that china is not selling the u.s debt…well not yet at least. All china has to do is sell all that debt , and the u.s economy would literally collapse overnight. That is called leverage. China is not a friend of the u.s believe it or not , and so with that being said china has the power to collapse our economy anytime. One more thing interest rates are rising , and thats not good considering the fact that we have had 0% interest rates for so long we couldn’t handle anything higher than 5%. This article is a classic sign of brainwashing propaganda aiming to keep the public completely clueless as long as possible.

August 28, 2013 at 10:01 am
(45) Frankley says:

Hahahahahahahahahahahaha oh man I could not stop laughing at the number 1 reason why it won’t collapse: The US prints it’s own money.
Hate to break it to you but that’s the main reason why you’re in this mess. Can’t just press the print button and wipe away trillions of dollars in debt. Wake up people.

September 27, 2013 at 12:47 pm
(46) PAUL says:

I think we should have more counterfeiters and really make the economy hum. Sorry could not stop laughing a reason number one so missed some other comments, who probably had a rational explanation.

September 28, 2013 at 9:46 am
(47) Kimberly says:

Regarding the U.S. printing its own money: Short-term, that IS a reason the U.S. won’t end up like Greece. The ability to pay off debt by printing the global currency is an advantage that is unique to the U.S., and is a reason why it’s been able to rack up debt without any real adverse impact.

However, it’s not an advantage we should abuse. At some point, the U.S. needs to live rationally and keep a sane debt-to-GDP ratio below 90%. If it doesn’t, then we are simply exporting inflation to India and other countries. This hurts their economy, which gives them less ability to import our goods, which gives us no one to sell to. In the long-run, abusing our ability to print the global currency means there isn’t enough true demand to keep the global economy growing at a health rate. Bernanke does not take any responsibility for this.

In other words, I’m not saying printing dollars is a grand and glorious thing. I’m just saying it’s not going to cause an economic collapse in the near future.

Kimberly

October 15, 2013 at 3:38 pm
(48) Chinese Guy says:

Here in China everyone gets rid of dollars. We buy euro and yen.

In Russia people buy euros.

So I dont really understand why the dollar is a world valuta?

Why should not US economy collapse?

The brazils economy is in much better shape.

October 15, 2013 at 4:51 pm
(49) useconomy says:

Well, I think that more and more people will start turning to euros, yen and possibly even the yuan as it becomes more available. To find out why the dollar is the world’s reserve currency, read: http://useconomy.about.com/od/tradepolicy/p/Dollar_Power.htm

November 5, 2013 at 3:59 pm
(50) mike real says:

LindseyWilliams says dollar collapses Jan 1st, 2014. How about this?

November 5, 2013 at 4:24 pm
(51) useconomy says:

Does he say why it will collapse on January 1?

I don’t believe it will, although it’s continuing to get weaker. Tea party threats to default on the debt don’t help. China is getting nervous, and moving toward establishing the yuan as a replacement global currency. However, I don’t think this will happen by January 1. Here’s why

http://useconomy.about.com/od/inflation/i/dollar_decline.htm

http://useconomy.about.com/od/criticalssues/p/dollar_collapse.htm

Kimberly

December 4, 2013 at 6:49 pm
(52) acewolf says:

Sure the economy is improving at a 1-1/4 percent, The U.S. is bracing it up with 85 billion a month in borrowed money. The things in place to keep us from collapsing? Printing money, and borrowing money. There is not even close to half the U.S. dollars in existence in the whole world as to what we owe. The problem is if we have another recession, we cannot borrow any more money to get interest rates down because they are at zero now. If printing money would actually work, fine, print every American in the U.S. a million dollars, we would all buy houses pay our debts, and buy cars. Why don’t we? The value of the dollar would collapse, just as it is going to eventually at the rate we are printing.

December 5, 2013 at 3:29 pm
(53) Kimberly says:

Hi AceWolf,

The $85 billion being printed every month WOULD create inflation IF banks and businesses were putting them into the economy. Unfortunately, banks aren’t lending it all out and businesses aren’t using it productively to create jobs. Instead, companies are buying back share, artificially boosting stock prices.

Kimberly

December 8, 2013 at 11:54 am
(54) Milliondollarbogus says:

Reason 1-Dollar won’t collapse because USA prints its own money. If it is so then you guys don’t need to work anymore. Just print dollars and make a everyone a millionaire or even a billionaire. And assuming that dollar won’t collapse you guys can keep on living like Bil Gates cause you are a billionaire.

December 9, 2013 at 11:56 am
(55) Milliondollarbogus says:

Ok, I am gonna give counter arguments against each of your ten points.
1.The U.S. debt, though high, won’t cause a collapse. Unlike Greece, the U.S. prints its own money.
— If it is so then what your government is waiting for. They can just print money and make everyone a millionaire, even billionaire or maybe trillionaire. And then you guys I guess will go the moon for a vacation trip cause you are a trillionaire. Yoho.
2.The U.S. could possibly run a much higher debt to GDP ratio than it does now and still not face economic collapse.
—— We are not talking about one sector of the economy collapsing like what happened in 2008. But the fact is you have to go the root cause which created the problem in first place which is easy , worthless paper money that Fed pushed into the system.
3.Obama Added to the Debt to get us out of recession, not send us toward collapse.
—– This is like without any logic, reason you are blindly putting your faith on someone. It is equivalent to say “Don’t worry. Nothing is gonna happen cause God will protect us”
4.The U.S. won’t Default on Its Debt.
——Again where is you logic that backs that statement. You can only say USA won’t default cause you will print money like hell and pay the debt.That will destroy the value of the dollar.

December 21, 2013 at 5:00 pm
(56) citizen subject says:

When Reality collides with Fiction, you get a correction. (example is price of Gold/Silver on Stock Exchange vs. at the local Coin Dealer) Might look like a collapse, it’s simply nature taking its course.

December 21, 2013 at 6:15 pm
(57) Kimberly says:

Very well put!

January 7, 2014 at 8:10 am
(58) Andrew says:

Hate to tell you lady the US does not print its own money a privite bank loans the US money and in its 101 year history has never had an audit and how about your global warming looks like the coldest day in 20 yea
rs just passed here in missouri

January 7, 2014 at 9:09 am
(59) Kimberly says:

Hi Andrew,

The Federal Reserve is an independent entity, but it’s not a private bank. Here’s more:
http://useconomy.about.com/od/governmentagencies/f/what_is_fed.htm

Its goal is public policy as opposed to being profitable. Here’s exactly how it prints money:

http://useconomy.about.com/od/glossary/g/Federal-Reserve-Printing-Money.htm

The polar front could be a consequence of climate change, which is also called global warming. Although the average temperature is rising, that doesn’t mean it’s happening uniformly. One of the results of the ice caps melting is shifts in the jet stream, which brought the arctic blast to your front door.

January 29, 2014 at 9:46 pm
(60) manny says:

Unemployment is a reality cause Americans are spoiled! There are too many programs to help single moms with 8 kids from 12 different fathers and unemployed that collect checks sitting at home doing nothing… This country is becoming lazy! you complain cause you can’t find a job with a masters … Cause you’re looking for a masters degree job… Work at McDonald I’m sure you’ll find a job… Imigrants and low income citizens feed families with average jobs… Again unemployment is a fantasy… If you want to and have the will to sacrifice you will find a job!

January 30, 2014 at 1:45 pm
(61) Kimberly says:

Hi Manny,

Please tell that to this reader:
“I am a 52 year old male. I worked in construction for 32 years. I had suffered 3 major crush injuries. Our workers comp is not there for the worker, it’s there to protect the company. Now I am 100% disabled just recently I had found out I have cancer. I paid taxes for 32 years, paid into SSI for that entire time why are the medicare and SSDI and SSI calls hand outs or entitlement? We paid for the programs.”

Here’s more of his story:
http://useconomy.about.com/b/2013/10/10/should-entitlement-programs-be-cut.htm

Kimberly

February 13, 2014 at 10:44 am
(62) 101st Airborne Division says:

Baltic Index down. Retail numbers way off for DEC 13/JAN 14…housing down 2%…Recovery Summer was 2009. What now 99 weeks paid unemployment? Ocare a “disincentive to work” – $80 Bazillion monthly pumped into T’s…gas is going up 30% shortly due to refinery maintenance. 1/3 of Americans getting govt assistance. You’re outlook and the stats you provide don’t include drought…flooding… Freezing…. Somebody – not this bozo in charge- but someone taking out the trash in Iran. Our world teters on a fine line. I’ll invest in lead as my precious metal of choice….if our households were run as our govt is we’d be incarcerated. You should apply for a job at MSNBC.

February 19, 2014 at 12:41 am
(63) Ed says:

Uh the Federal Reserve is in fact a consortium of private banks. Your statement that it’s an independent agency but not a private bank is contradictory. You really need to do a little more research. Alan Greenspan even stated the federal government cannot tell the Federal Reserve what to do (youtube his interview). If that doesn’t scream ‘private’, I don’t know what does. And please don’t try to spin the gravity of that comment. The Federal Reserve is private and is unconstitutional as the constitution specifically states that only the Department if Treasury is authorized to print U.S. currency. You need to step back from your belief system and open your eyes. Watch America: Freedom to Fascism. I know it’s diffucult as it was for me but you will be better for it.

February 23, 2014 at 1:17 pm
(64) Malarkey says:

stock market over inflated 86 million people supporting 300millon people unemployment is over 30% one can not keep printing money forever the dollar is worth less than half food is going up toilet paper rolls are shorter cereal box hold less peanut butter jars hold less and the price is going up your story is pure malarkey

April 4, 2014 at 12:34 pm
(65) Victor says:

You got to be kidding me. Amerikka is BANKRUPTED and the FED has been pumping in billions every month to keep the illusion going. Yes the stock market is HIGH and can reach to 50k because its RIGGED by the ELITE its not real its fake. The REAL stock market has been long gone since 2008 or even earlier. Let me explain why. The numbers the US Government been feeding the general public are manipulated. For example, the job rate is NOT 7.3% but has surpassed Great Depression levels to almost 40%(see shadowstats.com). The Housing Market is worst than 2008. There has been ten of thousands layoffs from mortgage companies because there no more loan applications being filled out. And as the months into years go by it will be perhaps 10 times worst than 2008. The ELITE said “We’re going to kill the dollar” and their plan will be implemented. When that takes place the USD will become worthless and that will usher in the collapse not only in Amerikka but at a global scale. It will make what occurred in Weimar Germany and Zimbabwe like child’s play in comparison. Get ready to pay $100 Trillion for one loaf of bread.

May 9, 2014 at 12:27 pm
(66) get real says:

$ 750,000,000,000 reasons for WAR, this year alone. Divide that by tax payers, keep doing that, for year, after year, after year. This is not to mention the medicade, SSI and ALL OF THE OTHER monies spent to BUY VOTES… Hey Kim…you are right, all is peachy! Go on and keep telling yourself that, keep the embedded links coming too…they make me feel warm and cozy at night. Having worked all over planet earth, having seen who is working in the USA and who is not, seeing where the money goes, and it is NOT to your neighbor…or not unless they live in the Hamptons that is… yea, all is G R E A T! And it can not do anything but get better! Fudge the unemployment numbers some more too…they were at 3.1 % last I looked, or was that 1.3 %…yea, 01.1% GOOD JOB reporting the. HOW IS THAT CHANGE working out for you, for all of your friends…do ya BELIEVE now? .

May 9, 2014 at 3:51 pm
(67) Kimberly says:

Whoa! I didn’t say things are great, not by a long shot. There are a LOT of problems, income inequality and unaffordable defense spending being some of them as you mentioned. However, that’s a long way from economic collapse.

Kimberly

May 10, 2014 at 7:04 pm
(68) Mike says:

May 2014, Debt now at 17trillion, wars emerging everywhere, Police state bigger than ever.

Obamacare killing healthcare for millions upon millions including my relatives.

We are living an oligarchy.

Might want to update this article and or remove it completely.

May 11, 2014 at 2:54 pm
(69) Kimberly says:

Hi Mike,

The debt is $17 trillion, I agree, but that won’t cause a collapse. Instead, it’s creating slow growth, which is what we have right now.

Although Obamacare affects everyone differently, and may hurt some people, that in and of itself is not enough to cause a collapse.

Kimberly

May 18, 2014 at 8:54 am
(70) pamela says:

your links that are supposed to be citations are links to other articles you’ve written lol so so lame

anyway…. start preparing like everyone else. if you don’t and when the economy DOES collapse you sure aren’t getting any of my goods :)

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