What Would Happen if the U.S. Declared Bankruptcy?
Many Americans feel the recession will soon pass and things will get back to normal. Unfortunately, we may be witnessing the early stages of a breakdown of the U.S. economic system.
The infographic below goes over what would happen to the United States economy if it were to have a massive failure.
You may ask, “What does bankruptcy mean for a country?” It could mean many things, and affect different aspects of the economy, including inflation, the price of imported goods, interest rates and the ability of the government to operate.
While an individual filing bankruptcy may be able to get a fresh start, if an entire country is pushed to the brink the consequences can be serious and widespread (just take a look at recent events in Greece).
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Is the U.S. in a Debt Spiral?
Mots Americans feel the “recession” will soon pass and things will get back to “normal”.
Unfortunately, we may be witnessing the early stages of a breakdown of the U.S. economic system.
According to the U.S. Treasury, the U.S. national debt will top $13.6 Trillion in 2011 and climb to $19.6 Trillion in 2015.
The United States has lost 10.5 million jobs since 2007. Interesting parallel fact: 9.2 million unemployed Americans are not receiving unemployment insurance.
Fifty-five percent of the U.S. has experienced unemployment, a pay decrease, a reduction of work hours, or an involuntary move to part-time work.
Twenty-eight percent of U.S. household have one member looking for full-time work.
And, to make things worse, the average time to find a job has risen to 35.2 weeks (nearly 7 months!).
For the first time in U.S. history, more than 40 million Americans are on Food Stamps. This is expected to grow to 43 million Americans in 2011.
In 2010, the U.S. trade deficit with China was 27 times larger than it was back in 1990.
If the Federal Government stopped borrowing and spending so much money, our economy could collapse. But if we keep borrowing and spending so much, it could make an eventual economic collapse much worse.
If the U.S. defaults on its obligations, it could lead to a global depression.
If the U.S. decides to pay its bills by printing money, it could lead to hyperinflation.
The means other nations could stop lending the U.S. money or raise interest rates. This would force the U.S. to raise taxes or slash government programs to reduce obligations.
Worried about your own personal economy? If you’re in debt and don’t know how to get out, consider talking to a Chapter 7 attorney about the bankruptcy option.
Most people are allowed to file Chapter 7 if their income falls below their specific state median income levels.