All great empires throughout history have fallen. The Great Roman Empire fell for a number of reasons, some because their army was stretched thin with them occupying several countries and fighting several wars at the same time. The cost of supporting these troops depleted the treasury of the empire. This is very similar to America today. Barbarians were attacking the empire, cutting off vital supplies to the cities that created great unrest of the people. Today we are being attacked by terrorists and our energy supply comes from hostile countries in the middle east. The Great Roman Empire survived in the last few years on credit from it's wealthiest of citizens and the Nights Templar's. Today America is borrowing trillions of dollars through government bonds held by the wealthiest of our citizens and corporations and by many foreign nations like China, Russia, Saudis Arabia, and maybe Iran. When the Roman wars and hostile attacks depleted the treasury, it became insolvent and their entire economy fell apart. Today we are on the brink of a total world economic collapse. Has our days of a mighty empire come to an end? I predict yes. This is why:
1. The worlds population has grown from the dawn of man to the 19th Century at a very slow rate, with famine and disease killing of large amount of populations over the centuries. In 1650 the world population was 500,000. In 1804 there were 1 billion people in the world. There was a dramatic increase int the rate of grown when coal was discovered as an energy source and steam power was invented thereby causing the industrial revolution. In the late 19th Century oil and natural gas was discovered as energy sources and more. The ammonia in natural gas and also from oil when processed into gasoline allowed farmers to easily fertilize their crops without natural organic processes, the yield per acre soared. Farm equipment was now powered by diesel and gas. As these machines evolved, they could plant and harvest thousands of acres of crops with less man power and with higher yields per acre. This in turn could feed a larger population. The world population is now over 7 billion and it is estimated that we will reach 9 billion by 2050.
2. The earth can't support this large a population with natural resources. Oil reached its peak output in 1970 and has been declining ever since. The oil we get today is more difficult and expensive to obtain. Example the deep sea wells in the Gulf of Mexico. The recent BP well blowing out and contamination of the gulf, gulf coast land and the open ocean. Easy to access coal as been used up. We must now cut the tops off old mountains of the Appalachia to reach it now. Underground mining is becoming even more dangerous and killing many miners each year. The price of oil is now $90.00 per barrel. It will continue to climb above $100 to $200 per barrel. This will raise the price for fuel to $5.00 to $7.00 per gallon in the US. and over $10 per gallon in Europe. This energy cost increase will affect everything we buy. As it is either made from oil or is transported by use of oil fuels and the factories that make the products use oil and coal to create electricity to run the factories. We will see the long lines at gas stations for what little fuel is available and for those who can afford it, reminiscent of the 1970s. But this time its not an embargo, it is lack of supply. Truckers will be impacted greatly as their costs rise and the lack of fuel will cause them to wait for available fuel. This will slow down the delivery of commodities across the country. Currently our food travels as much as 1,700 miles from processing plant to grocery store. If there is limited fuel, that is going to be much more expensive and difficult.
We will start to see hyper inflation as a direct result of energy costs. America has not invested in alternative energy at the speed needed to convert from fossil fuels to renewable fuels, thus we will be caught in the price squeeze. Other countries, even China has recognized that they must convert their economy to renewable alternative energy if they are to continue to evolve from an agrarian economy to an industrialized economy. Most countries in Europe have also started to push alternative energy and conservation of energy to delay the inevitable loss of fossil fuels.
3. Food and other commodities will start to become in short supply. Several factors will effect our food supply: Climate change is affecting the jet stream and thus altering the storms that provide the needed moisture to grow crops. We will see greater swings in weather patterns, from unusual warm areas, unusual heavy snow areas, and unusually cold areas. As the salt content of the oceans declines the warm water that keeps much of Europe in a moderate climate will change it into colder and harder winters and hotter and dryer summers. Another factor is the cost of energy to grow the food supply will increase the retail cost of food, therefore you will need a much higher income to pay for your needed supplies. Population growth also puts greater demand on the current level of output of food. We are not increasing the acres in the world to grow more food. Actually it is decreasing as the population is building more homes and businesses on fertile farm land, taking it out of supplying our needed substance. Compounding this further is more acres that are currently being planted for food will plant crops for biofuel use. This will add to the stress of available food and the price you pay. We are already seeing this as many commodities prices are starting to rapidly climb in the market.
4. Water is the source of all life. Without fresh water, we nor our plants can survive. The problem is that with climate change, greater demand for fresh water with the expanding population and the polluting of what fresh water we have will soon be at a critical depletion point. Water rationing will be the norm. The cost of water will escalate to insane levels. Wildlife will suffer greatly as humans claim more of their water. There will be great political battles between the agriculture producers and urban dwellers for access to what water is available. We see this now in the US west. Las Vegas is very thirsty and trying to find what underground water they can transport to the city. The Colorado River and thus Lake Mead is drying up. The farmers are screaming that they are not getting enough of it and the city desperately needs more. The Wasatch Front cities are also fighting with the rural citizens for the water from the Central Utah Water Project. It was designed to supply farmers with more water, but more of the water is being diverted to the urban centers along the Wasatch Front.
As we divert natural water flows for drinking and farming, the land becomes dryer and the plants that live in what would be otherwise moist areas are now drying up, we are seeing major fires. We see the huge fires in Australia, Israel, South America, and here in America. Yet even with the diminishing water supply, we will be subject to major flooding due to the changes in weather patterns from climate change.
4. The world economy is one giant Ponzi Scheme. Nearly every country is living on credit, with the exception of China and the oil producing countries. But they are holding paper that can very soon become worthless should America default on our debt. The economic policies in the US for the past 30 years have set us up for complete economic failure. We have borrowed more money than we have in resources to pay for that debt as a nation. Even if we had a 100% tax rate on every dollar of income from individuals and corporation, we could not pay off the debt over two generations. America can't borrow any more money. It has to increase taxes to even to start to balance even the annual budget to not keep increasing the total debt.
The countries population growth is at a level that there will be 30% of the population unemployed. There is no feasible way to create in the private sector enough jobs for the currently unemployed and all the new workers entering the market every six months. This is also true of many other industrialized nations. So what happens to these unemployed? Government can't keep supporting them with borrowed money.
Our free market economy is dependent upon growth in population and thus demand for goods and services. However, when the population reaches a point of saturation in which there can not be enough jobs created that provides spendable income for this growing population, there will be fewer people able to purchase the goods or services, then businesses start to fail, as we are seeing now. The huge profits that corporations are earning today are leveraged earnings and can not be sustained. Eventually the profits will start to fall and accelerate in the decline very rapidly. We will return to a time when there was a huge population of poor and a very small population that have enough wealth to purchase what they needed to live. Of course this will also result in the decline of the population as the poor will fail to get needed health care and will live in poor conditions that will aggravate illness and death.
In America we have a political faction that is verbally attacking the national debt and say they want to reduce it. However their actions speak differently. They have passed rules in the House of Representative that requires any new spending to be offset with cuts in other spending. This is good, but they also have a rule that tax reductions do not have to be offset with spending reductions. Thus they can increase the debt with continued tax reductions that they are putting forth. Again this is part of their starve the beast plan to kill the federal government. Should the Republicans that include this ultra-conservative faction vote to not increase the debt ceiling of the country, America will be in default in its payments to the bond holders of our debt. It would also close down government totally. They like this idea so they can remake government the way they want it.
When the government shuts down that means air traffic control stops, grounding all airplanes, the military will have to stand down in the two wars we are fighting because there will be no funds to pay them or all the suppliers and contractors involved in the war. AMTRAK will stop running, the FBI, CIA, US Marshals, FDA, USDA, DEA, justice department, state department, congress and the white house will have to close. The courts will have to close as well and the federal prisons, well who knows what will happen to the inmates if there is no guards to take care of them. The coast guard will shut down and there will be no rescues on the open seas or patrols for terrorists. The border patrol would also have to close down allowing open access to our borders.
However there is a major problem with this plan. The US Dollars is the world currency. All international trading in the world is done in US Dollars. Everything from rice, wheat, oil, coal, cars, electronics, etc. When a country purchases these items from another country they must go the the money market and buy US Dollars to pay for the goods. If America defaults on its bonds and shuts down, then the dollars collapses sending the world in to economic chaos. A world depression will ensue and the world will scramble for a new world currency. The dollar would then become worthless, like the old Soviet ruble. That is why China was wanting the UN to establish a world currency separate from the US currency. They could see the writing on the wall of a possible collapse of the dollar. Every penny you have in the bank would be worthless. Every investment you hold would be worthless. The Euro is not stable enough to become the world currency, so that leaves a big hole in the world economy.
Most states in the union are near bankruptcy. They do not have the ability to borrow the large sums of money they need to balance their budgets. The states are dependent on the credit of the federal government to bail them out. The alternative is to reduce government services. These include education, highway construction and repair, replacing worn out infrastructures like water and sewer lines, they will have to reduce law enforcement and prisons, close libraries and schools, close recreation facilities and parks. Turn off street lights at night, limit or stop snow removal in the winter, reduce fire and other emergency personnel and equipment. Life will change dramatically returning back to the 19th century in many ways. There might not be enough money to chlorinate the water so everyone will have to boil the water before they use it, like a third world nation. This will increase the number of people unemployed, thus further damaging the economy. Update: well we are seeing more states starting to cut police and fire personnel, Utah might close some of its state parks, some cities are looking for corporations to buy naming rights to city parks and buildings. One school district in N.J. is cutting half it teachers, so class size will go up to 64 students. 2011 should be very interesting at a minimum of what states and local governments do to balance their budgets. The FED has already told them that there is no money from them to loan them and their bond ratings are dropping so the cost of borrowing will be much higher. Illinois faced the facts and raised taxes to preserve most services. It is inevitable that most all states will have to do the same, as well as the federal government.
The BIG question is: Is it too late to change the course of this disaster and save our nation from total collapse? The answer: It might not be too late. Radical changes in taxation must be made. The very wealthy must step up and have their taxes dramatically increased. American lifestyle must change to reduce the demand for natural resources. There has to be a fundamental attitude change regarding family planning and the number of children one has. We must start to reduce the worlds population by reducing the birth rate in all nations. We must modify the free market system so that it can exist without continuous population growth and huge energy consumption. We must reduce the negative influence that man might have on climate. Granted not all climate events are man made, some are natural events, but there is little doubt that man has affected the climate in the past 200 years like no other time in the worlds history. We must change what we eat that does not consume so much land to grow it and over fishing the seas. Some suggest we start eating insects for protein rather than animal meat.
President Jimmy Carter warned us about this day. He knew that we could not sustain our current path in the 1970s. But we did not listen. Instead we elected Ronald Reagan and continued to consume fossil fuels at unprecedented rates. He reduced taxes and increase spending to an unprecedented 184% increase in the national debt. Deregulation of the credit market created easy credit and now we are drowning in debt beyond our ability to repay. We only have the conservatives to thank for this mess with their borrow and spend behavior that permeated over into society to do the same. We are now at the brink of collapse and no one is realizing the pending doom, especially the conservatives.
I am trying my best to conserve resources. I purchased a Prius to reduce my fuel consumption, we have changed out our lights in our home with LED and florescent bulbs. We have reduced the heat setting during the winter. We have reduced and nearly eliminated meats from our diet, but we are not vegans. We do enjoy meat when we go out to eat. There is a lot more we can do and should do, but like it is always said, change is very difficult when you grow up in such a rich country that has had an abundance of food and energy at very cheap prices, with the exception of the Great Depression and War II years.
One of the problems here in America is the natural behavior when faced with impending doom and feeling helpless in doing anything about it, that is to ignore the problem and hope it resolves itself. That is where we are today. There have been the non-religious doom day sayers foretelling of this day, but we have ignored their words and soon we will say, yes you told me so.
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