Another major economic term that most people seem to ignore is debt. Debt however will be the main reason for coming collapse of the global economy. It’s debt which has got this country into this trouble. It will be debt that will usher us into the next chapter of history. We all analyze our own personal debt. We borrow for things like our homes, cars, and frivolous items through credit cards. We believe there to be good debt and bad debt. A big deception taught has been that there is actually good debt. This is false. It’s never good to owe anyone. It reduces your net worth and takes away from your amount of control. We understand that about our personal debt, but most don’t ever think about this point on a global level.
Local, State, and Federal governments all borrow money to fund their jurisdictions growth. The larger the area, the larger the debt. They pay this debt back from the taxes they collect and fees they charge. Governments borrow money through issuing bonds. There is always risk when someone has debt. The lender can ask for their money back or if you are late they can harm your rating and your ability to borrow any more money. Or if you owe too much you might not be able to get any more.
The lender is always more powerful than the borrower. No matter how much of a front the borrower would like to show. This is true regardless of whom the borrower and the lender are. Debt is our detriment.
America’s debt is currently approaching $18 Trillion. We owe massive structures like the Federal Reserve. We owe an exorbitant amount to China as well. We have borrowed to keep our economy afloat. This pattern will not hold.