How much more pain can the US economy really withstand? I keep hearing about the mismanagement and how costly their mistakes have been (the Iran war, overspending on AI compared to China, the US debt, etc.)
I keep hearing over and over that they are messing up, but when will their economy actually collapse? This might sound ignorant I'm sorry. I genuinely don't understand how they are still alive
It's basically inertia, American economy has a massive stock of national wealth and trust. For decades, inflows like tax revenue and productive innovation filled the stock faster than outflows like debt and war spending drained it. And thanks to that, there's a massive amount of resilience that's been built up over many decades. Now the outflow is outpacing the inflow, but the existing stock is so large that we're not seeing any catastrophic effects yet. A huge country can absorb a lot of pain before anything visibly changes. The US still has strong buffers like deep capital markets, the dollar’s reserve status, and a large domestic economy. Each successive mistake chips away at these buffers, and when the stock finally runs dry, the system will tip fast. The economy won't collapse tomorrow, but it is living off stored up capital rather than current productive inflows. The damage is masked by the size of our existing stocks. Once those are gone, the real crash comes.
8 Comments
Syndication@lemmy.today · 19 pts · 28d
Rindogang@lemmy.ml · 14 pts · 28d
How much more pain can the US economy really withstand? I keep hearing about the mismanagement and how costly their mistakes have been (the Iran war, overspending on AI compared to China, the US debt, etc.)
I keep hearing over and over that they are messing up, but when will their economy actually collapse? This might sound ignorant I'm sorry. I genuinely don't understand how they are still alive
yogthos@lemmy.ml · 12 pts · 28d
It's basically inertia, American economy has a massive stock of national wealth and trust. For decades, inflows like tax revenue and productive innovation filled the stock faster than outflows like debt and war spending drained it. And thanks to that, there's a massive amount of resilience that's been built up over many decades. Now the outflow is outpacing the inflow, but the existing stock is so large that we're not seeing any catastrophic effects yet. A huge country can absorb a lot of pain before anything visibly changes. The US still has strong buffers like deep capital markets, the dollar’s reserve status, and a large domestic economy. Each successive mistake chips away at these buffers, and when the stock finally runs dry, the system will tip fast. The economy won't collapse tomorrow, but it is living off stored up capital rather than current productive inflows. The damage is masked by the size of our existing stocks. Once those are gone, the real crash comes.
folaht@lemmy.ml · 3 pts · 28d
A lot, because there's too many vassal countries propping up the US economy.
They will be going down first, like East Germany before the USSR.
muffedtrims@lemmy.world · 2 pts · 28d
It can't because money printer go brrrrrrrr
apfelwoiSchoppen@lemmy.world · 8 pts · 27d
It is even worse than that. From https://finance.yahoo.com/technology/ai/articles/morgan-stanley-drops-50-billion-113057367.html:
yogthos@lemmy.ml · 4 pts · 27d
when the bubble pops it's going to be epic
nosuchanon@lemmy.world · 5 pts · 27d
They figure they can use mass surveillance to control the restless masses and stifle the coming revolution.
They are putting everything into the surveillance state and militarization of ICE/brownshirts.
Fancy_Gecko@lemmy.ml · 3 pts · 27d
this is the best time to be alive … if you are a billionaire oligarch