Is the American Economy About to Collapse?

Certain financial writers have been making a little news recently with sensational articles suggesting that the American economy is likely, in one popular writer’s opinion certainly, to collapse in the course of the next year—not sometime in some uncertain future time frame but over the next few months. What evidence does he have and how likely is it?

Escalating National Debt

Some of the major facts facing our economy are clear. One reason for fearing an actual collapse, rather than the existing persistent decline as debt service uses an increasing portion of the nation’s income, is that the size of the debt accelerates over time.

National Debt Chart

The national debt is sky rocketing and its escalation is near the tipping point where it will accelerate so fast it will be unstoppable. Factors beyond the Federal Reserve’s capacity to control will at some time push up interest rates dramatically if unchecked soon.


Economic Disincentives: Woopi Goldberg and Dr. Ben Carson

There has been a lot of talk about economic disincentives recently, most of it confusing.

Recently Dr. Ben Carson appeared on The View. He and the ladies on The View, especially Woopi Goldberg, engaged in a debate that was quite significant. The problem is that they, and all the commentators I have heard, saw their views as polar opposites when they should have seen them as opposite sides of the same problem, a critical one for our nation.

Because there seems to be so little understanding of economic disincentive I thought I might share a little insight to help our readers understand what it really is and what it means.


Do Government Jobs Hurt the Economy?

Why do people who understand economics object when government jobs are proposed as part of the solution for the economic difficulties America and the world is facing today? Even though those making proposals to increase public hiring often seem not to understand the problem, there is a solid basis for objecting—especially when the money must be borrowed to do so.

Government Vs Private Jobs

Government (public) jobs are paid for by taking money from the private economy. There is no other funding source for the government other than taking from the productivity of the private economy. This means that in the end every public job is at the expense of jobs in the private sector.

This is not inherently bad, by the way. It is the way government works.