The coming economic crash: Feature Article
The coming economic crash has been attributed to a lot of different things.While some look to the changes that are being made by other countries for an explanation of this country's woes, others are quick to point the finger at politicians and local leaders for not having foreseen these hard economic times and done something to prevent them.It is also important to realize the idea of a coming economic crash is still a matter of opinion.While few will argue that we are in a period of a recession, many people still have faith in the ability that the U.S. market has in maintaining long-tern financial stability.Whether we are facing a complete crash or a stumbling block that we will look back on with little recollection, it may be impossible to say definitely one way or the other.What can be said is a report of what has happened in the past and form theories for what economic situations lie ahead.
Trouble with credit and debt
The Federal debt is valued at $7.2 trillion and growing by $1.71 billion per day.The total national debt (combined government, business and household borrowing) has grown from $13 trillion from the year 1990 to 2001, to what it is today at a growth of $32 trillion! This type of massive debt growth is extremely risky.Government officials have no idea how to pay off such a debt.But it is not only the politicians who are doing the spending.Individual debt is at an all time high.People have gotten in way over their heads when it comes to borrowing money for everything from a house to luxury or recreational expenses.People have forgotten that the money that is so easily obtained by a swipe of a credit card, is borrowed money and that it needs to be repaid.This excessive spending has affected the stock market in that interest rates were raised higher and higher in order to protect lenders from the loss of income from loans that continually defaulted or turned into bankruptcies.The entire economy was hit hard as people in all levels of government were unable to pay their debts. What will be the result?Consumers and businesses will diminish their spending and banks will become bankrupt from bad loans.
The start of the economic crash
According to a number of different theories we can expect some of the following things to happen as a result of an economic crash.In the event of an economic crash, the problems that we have in this country with debt will eventually lead to a drop in housing prices because foreclosures will become more frequent.Business owners will be forced to either outsource and cut back on local labor forces or go bankrupt from their debts.The dramatic rise in those who plan to retire in the near future (Baby Boomers) will trigger a mass selling of stocks in order for these retirees to be able to take advantage of their investments and live off of their returns.This dramatic withdrawal of investment dollars from the stock market will basically turn the economy into a bear market.Now let's review these possible effects in more detail.
Since after the Second World War, the United States has been consistently borrowing money to boost its military powers.Money had to be borrowed for the purchase of warfare and for the payment of those who were serving in the military.Eventually the military/police fraction of the economy has reached a point where basic social and infrastructure needs are being sacrificed to it.While some are of the opinion that these sacrifices are needed to ensure security others are of the opinion that there is no need for such aggressive spending.Partially because of its rapid accumulation of debt, the U.S. has lost a great deal of its ability to control foreign affairs to its benefit.Specifically oil producing nations and other power centers of the world that once relied on the United States for support are now strong enough to thrive on their own and take care of their own financial and economic interests.As a consequence of these developments it is quite likely that the US will be forced into a period of economic recession and some say that the situation can become serious enough to eventually lead to a depression.
These changes in power, spending and priorities have made themselves manifest on the economy in the form of a decline in the standard of living for the working class, a drop in the value of the dollar in market trading, a rise in inflation, a drop in the value of real estate, a rise in unemployment rates and a consequential rise in poverty rates and an increase in anxiety, fear and unrest particularly among the working class citizens and business owners of the country.
The causes of the coming economic crash and what can be done
The most popularly recognized causes of the coming economic crash of 2003-2016 by looking back and seeing where we could or should have done things differently.While we cannot change the past or the results that came from past decisions, there are changes that can be made today that will hopefully create a future that is more optimistic.
A sharp U.S. economic slowdown is the first cause that we can blame for the coming economic crash.Many economists predict that the combination of dramatically increasing debt as a percentage of GDP (which happened to reflect the slowest corporate earnings growth since 2002) and the collapse in the housing market will cause the global economy to stumble if not crash completely.The rise in interest rates that resulted from increasing debt is also a spreadsheet model that economists are closely associating with the beginning of what is now a crashing economy.Interestingly enough, China has everything to do with the third popular explanation for why the current economy is teetering on a market crash.While some countries can have economic crashes that go largely unnoticed by an international audience, what is said to be the imminent crash of China's market means a great deal of problems for Western markets who depend so heavily on China.Outsourced services are certainly affected back in the United States.
So we have some sort of explanation for some of the major causes of the coming economic crash, now what are we to do about it?Well, lots of people still are not sure exactly what should be done when.Taking action can be difficult, and taking the right action at exactly the right time really takes some doing.Yet that is precisely what needs to be done.People are worried, and most of them are right to feel so.Money is not worth what it used to be worth and uncontrolled growth of credit, trade and derivative flows makes this time in history very uncertain for national and international markets.The hardest part of acting on the poor economic times may be to simply break down the walls of security and fear that people have built for themselves to remain protected from an economic crash that they do not understand and may even be contributing to by saving rather than spending their money.
A religious perspective
The coming economic crash has been explained using just about every conceivable method of reasoning in the book.It cannot be argued that the coming economic crash is still in fact just a matter of opinion.Where there are matters of opinions there are personal beliefs.Where there are personal beliefs you will often find religion.Therefore, it is through a natural sequence of reasoning that taking a religious perspective to the coming economic crash is something that many people are doing.Of course explanations for a coming economic crash will vary depending on the particular beliefs that are held by the individual.For example, those of a Christian belief may see a coming economic crash (in the year 2008) as a sign of idolatry, immorality (often associated to homosexuality), sin, punishment (or withdrawals of the blessings of prosperity), etc.Statements regarding such "consequences of corruption" abound and can be easily found through a simple internet search.Some faiths cite scripture to support their opinions for why a coming economic crash is inevitable, expected or even deserved.If an individual has a certain religious belief regarding why an economic crash is coming, chances are that their religion will also have instructions for what should be done to protect the individual from whatever wrath is being wrought upon the world around them.Having a respect for these beliefs and the individuals who hold them is always appropriate, but can be especially important to business owners who are looking to gain their customer's business and obviously can only do so without offending anyone.