The next time someone tells you that the US government is operating in a fiscally sustainable manner and that our economy is growing strongly point them to the latest report from the U.S. Treasury Department.
According to the new report released yesterday all of our worst fears may soon be realized should the United States default on its obligations to creditors, employees, and recipients of state-sponsored benefits.
The report details the consequences of Congress failing to raise the debt ceiling so that the government can borrow more money. The political impasse will likely be resolved in the 11th hour just as it has been during prior showdowns. But, the report has much broader implications.
This is nothing short of an official admission and confirmation of the decades’ long woeful mismanagement of U.S. economic, fiscal and monetary policy.
Here’s what you can expect to happen on that fateful day when our government is no longer extended the credit it needs to cover its trillion dollar commitments:
“In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth,” the report said.
“Credit markets could freeze, the value of the dollar could plummet, US interest rates could skyrocket, the negative spillovers could reverberate around the world, and there might be a financial crisis and recession that could echo the events of 2008 or worse.”
“Considering the experience of countries around the world that have defaulted on their debt, not only might the economic consequences of default be profound, but those consequences, including high interest rates, reduced investment, higher debt payments, and slow economic growth, could last for more than a generation,” the report states.
While all the political hoopla in Congress will eventually lead to an agreement on raising the debt ceiling, the fact is that we are very quickly approaching our limit as a nation.
At some point our creditors are going to pull the plug. They understand that the $200 trillion in obligations we have will never be met. Countries like Russia, China, and even the private central banking conglomerates are positioning their chess pieces right now for when this day comes.
The end result is going to widespread financial and economy destruction, a meltdown of the U.S. dollar, and a collapse of our very way of life as tens of millions of Americans will be instantly impoverished.
Economic analyst John Williams has warned that when it does finally happen, we can fully expect disruptions to our food supplies and the normal flow of commerce.
Without the U.S. dollar as a viable mechanism of exchange, such a scenario could very quickly lead to civil unrest, violence, and widespread looting. While most Americans may deny that the possibility exists, it’s exactly the scenario that U.S. Homeland Security experts and the Pentagon have been simulating for years.
The U.S. Treasury Department has confirmed it can happen. The military and DHS areactively war-gaming contingency plans and stockpiling ammunition, recruiting soldiers for interment operations, and arming up local police forces. Furthermore, governments around the world are training for it.
Take their lead, and do the same on an individual level by developing your own long-term preparedness plan. Set aside food in case it is no longer available at grocery stores. Save some gold and silver to utilize as a mechanism of exchange should the dollar crash. Learn to use a firearm and have ammunition on hand to defend yourself when the masses start fighting for whatever resources remain.
While the timing of the Treasury Department’s report is designed to instill fear in the American public, understand that raising the debt ceiling will do absolutely nothing to resolve the underlying issues we face and the consequences that will eventually be realized.
Mac Slavo is the Editor of SHTFplan.com