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.
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.
