Last night I came to the conclusion that the economic collapse in this country is inevitable. We have been borrowing way past our means for some time now. The cost of this borrowing has been kept in check partially because our central bank has been buying up federal debt at artifically low interest rates. Our creditors have settled for low rates largely because the alternative have not been all that attractive. To think that these conditions will go on forever is insane.
I have a simple formula that I use. Wealth = Production - Consumption. If you produce more than you consume, you will grow wealthier. If you consume more than you produce, you will grow poorer. This holds for individuals, families, business, and even countries. Nothing really earth shattering here, just common sense. Some may debate the value of accumulation wealth, but I think that it is obvious that it is a worthy goal. Wealth gives you a cushion against bad times, the ability to build a defense against your enemies, and probably most importantly, it provides the capital to finance economic growth for the next generation. Ironically, although politicians claim they are for economic growth (i.e. the growth of wealth) almost all of their policies promote non-productive consumption (welfare, food stamps, unemployment insurance) and punish production (taxation, regulation, labor and energy policy). My point is that our national debt problems encourage consumption now. Obama and his friends like to call government empenditures 'investments', but they are really just consumption of other people's wealth - both that of ours and our childrens. Decreased wealth, coupled with increased money pumped into the system cannot possibly end well. There are economic 'laws' here that will inevitably resolve themselves catastrophically. This is no theory, there are plenty of historical examples that one could examine to get a sense of what the outcomes will be.
And when catastrophe strikes, there will be those who will say "they saw this coming, why didn't anyone do something to prevent this?". The funny thing is, like the Savings and Loan crisis and Social Security, people DID try, and those people were conservatives.