If Your Hometown Is On This List, You’re Screwed

June 1, 2013 by Floyd Brown 2 Comments

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In case you missed parts one and two of our series, we’re exploring what America will look like after a government collapse. Today, we turn our eyes toward the federal government itself.

First, you need to understand that some areas of the country – some states, some localities – will fare much better than others.
If your city or state is highly indebted, they’ll be forced to cut back on services. Look around your community. See more pot holes? Are the parks looking trashed? Is graffiti staying around longer?
It’s the result of deferred maintenance and already-installed austerity measures. For example, many police and fire departments have already seen major budget cuts.
This has already happened in financially fragile cities such as the bankrupt city of Stockton, California. In fact, Stockton is a good microcosm of the fallout from a government collapse. The AP describes the situation there:
Stockton has tried to restructure some debt by slashing employment, renegotiating labor contracts, and cutting health benefits for workers. Library and recreation funding have been halved, and the scaled-down Police Department only responds to emergencies in progress. The city crime rate is among the highest in the nation.

So after a collapse, don’t expect the government to give you the same service you’ve experienced in the past. Every unit of government will be affected, and the already-poor customer service is going to get even worse.
By the Numbers
It’s my belief that some unexpected event – an oil shock, a Lehman Brothers-type banking collapse, or a sovereign debt crisis – will trigger a monumental collapse in the not-too-distant future. It’s the inevitable result of 30-plus years of misguided economic decisions. Finally, all of our overspending and our mistaken ideas have left no room for error.
Just over 30 years ago, the U.S. national debt was less than $1 trillion. In those days, the total amount of all debt in the United States was only $2 trillion. Now the national debt is over $16 trillion, and our debts are collectively more than $56 trillion.
Let’s face it… This level of debt can’t possibly be paid by our sluggish economy.
That’s not all, either. Our power to grow wealth has been decimated, too. America’s share of global GDP has slumped from 31.8% in 2001 to 21.6% in 2011. Since 2001, the United States has lost more than 56,000 manufacturing facilities. Not just jobs… actual factories. Millions of good jobs have been shipped overseas, and they’ll likely never return.
Subhead
Right now, the Fed is working desperately to forestall the inevitable. But Ben Bernanke and company won’t be able to hold back the tidal wave of reality forever.
If the United States took radical, immediate corrective action, they might be able to forestall a total debacle. But I’m not optimistic.
On the bright side, the U.S. government actually takes in more revenue now than at any time in recorded history. If they just controlled spending, they could pay the bills. Here’s how it could work.
Currently, the federal government brings in $200 billion in revenues each and every month. If they prioritized spending, they could pay interest on the national debt of more or less $30 billion. Then, they could pay their liabilities to Social Security, which currently costs around $50 billion. Medicare and Medicaid cost another $50 billion. Active-duty military pay costs about $2.9 billion, and veterans’ benefits cost about $2.9 billion. A pay-as-you-go system would be tight, but it would work. Out would go Obamacare, the Department of Education, farm and green energy subsidies, and much more. But it would work.
A collapse is inevitable, and it’ll happen. The question everyone needs to ask is: will it happen in an orderly fashion, or after a complete and total economic collapse akin to the Soviet Union collapse in 1989? I know which one I’d prefer.
Photo credit: Dave Merrick