What would happen if the US govt went bankrupt? How would that affect the typical American?
I’m an American very concerned about this. What would happen to me should the govt go bankrupt?
Is bankruptcy possible under current circumstances?
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Dont worry America wont go bankrupt fro the simple reason that the world’s other countries money is invested in USA.But the dollar can go down,so that value of the foreign investments will also go down.In fact the countries who have invested in USA have more reason to worry than Americans.
You should maybe use wikipedia or some such and check out currency exchange rates, inflation, Maslow’s hierarchy of needs and The Malthus Curve.
Countries don’t go bankrupt. When Britain began to see runaway inflation in the 1970′s the Internatinal Monetary Fund stepped in, helped them build a new budget structure, and take legal measures to cut spending.
The measures were very unpopular, but they got Britain back on track; and a similar thing would happen in America in similar circumstances.
However, America’s creditors are unlikely to suddenly demand repayment of debt – even China would not be that stupid – so the situation is unlikely to arise.
I think it is safe to assume that the value of the dollar would fall drastically, which would give every amercian citizen far less purchasing power.
Instead of eating out, I think most americans would be eating red beans and rice, which is ok, I love them…..lol.
On an International level, I am not sure what the ramifications would be.
I may look into it now that you bring it up.
The US Government cannot "go bankrupt", silly, so don’t fret! THEY are the ones who print US currency!
Don’t watch so much television, the US economy is fine!
Well, I’m an Australian, and I see it like this.
You guys have one of the worst health care systems on Earth. There are third world countries with better health care systems than you guys, unfortunately. It’s not your fault. It’s the system you’ve got. If the US economy collapsed, the UN would probably step in to help you guys in an emergency. Big improvement in health services instantly.
Military forces stationed overseas would probably come home. These well trained people with their specialist skills would be in high demand. This amazing resource would be the backbone of your new workforce. You chaps have a pretty well organised and well funded military.
The US dollar would be worthless. Instead of tying value to the US dollar, countries would probably tie their currencies to the price of Gold instead, which is a lot more stable. World economies would take a huge hit, meaning that Americans with investments would be paupers. Trade would probably return to barter in the meantime, at least in the US. The world would be hit by a major recession. However, be confident that after every stock market plunge, there is an even bigger boom. Every time.
Rest assured, I am sure that the United States will not go bankrupt. They are a highly organised government with some of the best educated people in the West. Your Federal Reserve has already shown it’s ability to stave off financial problems by stimulating the economy with interest rate drops. (Thanks, but no thanks, by the way. Interest rates in Australia are seriously high, and your Federal Reserve isn’t really helping! All this stimulating the US economy is making it worse over here).
At the worst, if the government had serious financial problems, they would probably stop subsidising the US farmers. Farmers would go back to growing stuff for market price. People would buy stuff at market price, like they do out here. If a farmer can’t run the business based on what they earn from running the business, they go bust. The economy would stabilise itself.
In Berlin, post WW2, the Allies decided to stop setting the official price of things (the currency was cigarettes). By about noon the same day, the economy of the city had stabilised all by itself. A loaf of bread cost the same number of cigarettes all over the city! By MIDDAY! Economies are amazingly resillient things.
I doubt the US will go bankrupt. Microsoft is one company, and it’s bigger than the entire Australian Share market. I’m sure you’re fine.
If things get really bad, move over here. I’ll help you with the answers to the Australian Citizenship Test!
Best wishes