Quote from: Sjalq on January 20, 2011, 04:12:53 PM

Eventually (my feeling is the next 1000 days) the normal people who fit the bill for all this will reach their capacity to continue funding it and it will begin to drastically collapse in on itself. Then all these arguments about deficits being good or bad, all these crazy taxes being necessary or not, the idea of debt being a problem, will be put to rest, until people again forget how they got here and begin again...

Sad thing is, based upon personal experience by living in countries other than America that had an economic melt-down by far worse than anything America is currently facing... that life will continue and go on as usual.

I lived through the late 1970's and remember the double-digit inflation coupled with high unemployment (aka the "stagflation" of the Ford/Carter years). My family and my neighbors got along just fine in that situation, although they did complain about what was happening and put Ronald Reagan into the White House. It wasn't just the good looks of that former President of the Screen Actors Guild that convinced people he was ready for higher office.

Please don't mistake this as saying there aren't problems, as there clearly are. I am expecting something more like the Arab Oil Embargo of the mid 1970's or something of that nature to hit again with high inflation and higher unemployment. Then again I said almost three years ago that an Obama Presidency would be nearly identical to the Carter administration in terms of policies and the end result with the economy. So far he hasn't disappointed me with that assessment either. Obamacare was an interesting wrinkle that isn't the same, but otherwise the economic policies are roughly similar. Obama is also greying with his hair just as fast... proving to me that the guy can't delegate.

Still, what would be a horrible economy for America and people thinking it is the end of the world would be still the envy of the rest of the world for the most part. Not unless the U.S. economy got as bad as what happened in Zimbabwe would anybody really start to panic with widespread unrest. I think in that case the end-result of what happened with the Weimar Republic would be a better template to compare. That didn't do to well for the rest of the world and it would be ugly to see what an American version of THAT would become.

What the breaking point for the U.S. Dollar would be, I can't say right now, but I do think there is some more room for playing around. In terms of a world reserve currency, I don't see anybody stepping up to the plate offering anything better as both the Yuan, Euro, Pound, and Ruble are all equally weak in their own way and unfortunately also tied too closely to the Dollar to let the Dollar drop out of sight.