By Nauman Tasleem
Image submitted by the author
“On Sunday the wife’s parents shifted to het place because her old father’s pension had been drastically cut and he could not afford to pay the new rates of city taxes on his house. On Monday, when she went to work, the lady found her company was going to wind up because the bank was stopping the line of credit to the company. The next day the husband learnt he was out of job because the German conglomerate which owned the factory suddenly decided to shut down the plant and move to Mexico. On Wednesday, the state university, where the couple’s daughter was studying, closed indefinitely because the state was unable to procure the funds for the university. The next bombshell exploded on Thursday when the bank, where the couple had their savings, announced it had shut down because it was unable to meet the depositors’ demands for funds.
In the evening, a news broadcast said there were fears of an economic crunch and quoted a senator as having disclosed that, “The US is as broke today as any South American banana republic has ever been,” On Friday, the prices of groceries and all daily-use items had increased by 100 or more. On Saturday, the daily newspaper arrived with a black banner headline: “DOLLAR IN FREE FALL. THE UNITED STATES IS BANKRUPT.”
It is a paragraph from a book “BANKRUPTCY 1995: The coming collapse of America and how to stop it,” by Harry E Figgie and Gerald J Swanson. The chapter of the book ‘Week from the Hell’ has discussed the problems of a US family and a glimpse of the future for a US citizen.
If one has read the book in 1995 then he/she could have been thinking that the authors had exaggerated in telling the financial situation of the US but now things are moving exactly in the same direction that has been forecasted.
The things were going in the right direction for the US government till 1960s when the gross debt was hovering over $350 billion. However, after the assassination of President John F Kennedy, Vice-President Johnson took the office. Johnson administration started two highly expensive programs i.e. Vietnam War and the Great Society. Since then the US government has to resort on high deficit financing and heavy borrowing leading the country on the road to ruin. The public debt since then has seen a sharp increase leaving no choice for the government to take more loans for running the affairs of the country and cut developments programs. At the same time, the dollar is also losing the ground in international market and getting weaker day by day.
The gross debt stood at $5,700 billion but only in 10 years it crossed the $13,500 billion mark.
The world has also seen an economic crunch in 2008 with US suffering mostly. Many of its big institutions including Lehman Brothers collapsed and the US public was left high and dry. The economists are forecasting that another crunch, which is around the corner, would shake the US economy and daily life would be disturbed badly.
Obama administration which has promised with its public to increase jobs and reduce budget deficit is doing all-out efforts to control the things but looking at current situations and multiple factors, it seemed to be a futile effort.