Is the US too big to fail?

Why do you say that? The remainer of your post mentions only part* of the reasons why total collapse is unavoidable and not one thing supporting the idea that total collpase is "unthinkable."
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*No mention of "high cost energy," "unsuitable suburban infrastructure," "dropping home equity," "purchsaing power of salaries falling," "good jobs disapearing or converting into Mac Jobs," "internet allowing foreigners to do all information related jobs," etc.

Closely related to the one item you discussed (Social security is funded only by government promisses)b is that the baby boomers are now terminbating their years as the largest tax payers (AT THEIR PEAK EARNING LEVELS) and converting to be consumers of savingings, not net savers any more. Saving is where the real capital for invsetment comes from to promote growth. Growth on borrowed capital is not as procuctive. The aspect of the baby boomers retiring is probably more imprtant than the fact they will be collecting Social Secrity.

 

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Guess you were not around for last recession.

 

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I wonder if mourners of "manufacturing" jobs ever tried one. Those jobs suck in more than one way, period. Sure, 72k/year union job at GM plant may sweeten the pill, but in the south, manufacturing jobs pay $8-10/hr. WalMart is a better "career" option, all things considered.

Nob habla Inglese at this plant.

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If Chinese are stupid enough to work for green paper, let them.

Introduce factory work, and farewell joy, health and liberty; farewell to all that makes life beautiful and worth living.

 

there is a perfect 100% chance of the US failing entirely...

period...

anyone who thinks differently is lost in ignorance...

an interesting question would be "how long will it be until?"...

some of the posts in this thread are ample proof of the truth in this quote...

here is an example of thinking of the last 6000 years and thereby gaining perspective...

excellent...

Assyria, Hittites, Medes, Medo-Persians, Zulus, Tartars(tatars), Vikings, Huns, etc. etc. etc...

 

I am not sure what is meant by those who think that Total collapse of America is highly likely or inevitable. I am not sure I understand how soon they expect it to occur.

To me Total collapse translates to well over 50% of the population homeless and having problems obtaining food.

England & Rome were included in a list of collapsed empires. The British Empire might be gone, but the British Isles, Canada, India, Austrailia are not in dire straits yet. Rome declined over a period of several hundred years, starting with the loss of the more distant parts of the Empire. I would not apply the term Total collapse to either of those empires.

As I posted previously: I expect decline but not Total collapse.

The interesting speciulation is the matter of USA fragmenting into smaller political entities, and/or an undergound economy rdrastically reducing the power of the federal governmenbt.

 

Freddie and Fanny are commonly considered to big to fall for reasons stated below and Congress just passed bill to delay their collapse. Thus adding to debt exposure, but not to actual the debt IF the housing defaults were terminate. (Fat change of that, as the default rate continues to accelerate). This will hasten the day when the US COLLAPSES.

"If the U.S. government walks away from Fannie and Freddie, these overseas investors will worry that the U.S. government will walk away from the other U.S. debt they own and from the dollar itself. There's already a suspicion among overseas investors that the U.S. government will try to solve its dual problems of a massive government debt and a massive trade deficit by letting the dollar tank. On the other hand, if the U.S. government does back Fannie Mae and Freddie Mac, it runs the danger that overseas investors will simply add Fannie and Freddie's $5 trillion in mortgages and guarantees to the $9.5 trillion the U.S. government already owes. By that calculation, a bailout would increase the debt level of the U.S. by 53% overnight. ..."

FR0M: http://articles.moneycentral.msn.com/Investing/JubaksJournal/TheHugeThreatToTheUSEconomy.aspx?page=1

Article also notes that the major holders of US debt (China, Japan, oil exporters) are already trying to get out. This 53% overnight increase in the US obligations will not go un-noticed.

 

Isn't the US the same country that kept telling all other countries [China, Japan, India] that they should not prop up failing corporations because it was bad for "free trade"?

 

Instead of viewing Fannie & Freddie as too big to allowed to fail, perhaps we should view them as too big to save.

The damn politicians, esprecially the liberal types, create huge entiies like Social Security, Fannie, Freddie, et cetera. They do not realize that large bureaucracies with federal backing tend to be come very inefficient.

If the normal incurance & banking industries had been allowed to undersrite mortgages, none would be as big as Fannie/Freddie. If one or two failed, it would have been no big deal.

Nobody seems to know or remember that trhe first really coercive monopolies were the Western railroads. The Sherman antitrust act (circa 1990) was partially intended to regulate those Western Railroads.

How did the Western railroads become coercive monoplies? There were created by government loans & legislation. The federl government wanted to devlope the west faster than private enterprise was willing to finance expansion in that direction. They created the monster and then had to pass regulation to control it.

 

That is probably wiser than what has been done. To make an alalogy: If track start got gangreen in one leg, he might try to save it and thus cause his death. US was a "track star." US is unwilling to accept the change it its capacity. US is in denial.

I think Fanny & Freddie should have been broken up - perhaps one for each of the regional FED districts and place under their control. Also the wealth of their multi-million dollar salary CEO's should be conficated and distributed to the share holders they did not serve.

 

if Fannie May and/or Freddie Mac fail...

our economy would collapse... 'the giant pool of money' would collapse in many ways also... that's the entire wealth of the world btw - the 'pool of money'...

the only people buying any property of any type after that would be those who could pay cash upfront in full, no mortgages of any type would be available, even on car loans... most likely there would be no credit of any type, period...

of course this would only be a problem if the nation as we know it actually survived the meltdown without some form of catastrophic war, or a civil unrest that destabilized the nation...

when you talk about Fannie May and Freddie Mac you are talking about Trillions, with a capital T, Trillions of dollars, approx 5.7 Trillion to be exact... our government could not bail that out under any circumstance... period...

if they fail you can kiss the fucking US of A goodbye... and when our trade deficits, and the people getting rich off of them while slowing destroying our nation, disappear... the rest of the world can kiss life as it knows it goodbye too... especially China, we are funding and financing both the growth of the economy and military of our own next superpower enemy...

 

hahaha I read this title and started laughing!

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Wow that's scary.

 

I say let them fail. Life on Planet Earth is not going to end. Revolution happens every now and again. The fat wealthy morons who inherit wealth need to be kicked aside to allow the young smarter and stronger to the top.