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Frank Ryan: Dealing with Our Coming Economic Disaster

By Frank Ryan at American Thinker, 14 May 2011

The situation in the United States has deteriorated and will continue to do so unless drastic action on our federal, state and local government deficits is taken.? We need to trace what happens during an economic collapse.? In preparation for a collapse?here?is?what you can do personally to avoid being swept away by the tidal wave of fear, anxiety and trepidation.
During the early stages of a nation collapsing economically, the debt of the nation swells almost uncontrollably.? We, in the United States are already there.
From the burgeoning debt loads come the setting for collapse.
While the disaster can unfold in many ways, the course for the United States is already set in motion.
Inflation will increase.? When inflation hits, citizens with limited financial resources become economic casualties first.? These citizens are part of the beginnings of the downward spiral which ultimately leads to a depression.
In a misguided attempt to kick start the economy, our government will attempt another stimulus program which will fail.? The parameters under which Fiscal Policy might work if you are so inclined to believe that it does have long been broken.? Consequences of government actions are becoming unpredictable and are having unintended consequences.
The United States began the first phase of the stimulus program with the American Recovery and Reinvestment Act as well as the significant expansion of the unemployment compensation to pull us out of the recession.? Both actions were the wrong actions at the wrong time.
When stimulus programs fail, our government will try to increase taxes or fees, often in deceptive ways such as fuel taxes, oil drilling taxes, user fees or increased regulatory burdens.? This demand to increase taxes is to help support the citizens who were the first economic casualties of the recession as well as to pay for the deficit.
Next the bond rating agencies will downgrade our debt.? At that point, our interest rates will increase and further prolong the recession.? It is this downgrading of the debt and potential inability to sell our debt on the open markets that will be our undoing.
Our deficits will skyrocket because of the increased interest costs and creditor-forced reductions in spending will be enforced against us.? The U. S. Congress will no longer establish our budget priorities.? Our creditors will, as is done is Greece today.
The depression follows.
What then should the individual do?
Personally we have many options and they are extremely straightforward.? The actions to be taken are exactly the same action that government needs to take but will not.
First, know where you are financially.? Know your income and expenses and balance your own budget.
Second, you must start to build your funds if you are able.?? By establishing some cash reserves, you are reducing the risk of you becoming one of the first casualties of the collapse.
Third, you should consider paying off all short term credit card debt and minimize the use of credit cards unless you have the financial resources to pay for your spending.
Fourth, I would recommend refinancing your home with a 30 year long term mortgage considering how low rates look now.? If your home is “underwater” with debt already that may not be possible.
Fifth, build up credit availability if you have the discipline not to use it.?? If you do not have that discipline, adding credit availability is one of the worst things you can do.
Sixth, make certain you valuable to your employer.? Stay current and productive.? Many countries in Europe have 15% unemployment or more.? Try not to become part of the “expendable” because you have let yourself stagnate.
Finally, help your family.
Surviving an economic collapse is possible.? It will take 2 or more years for the U. S. to be in a full collapse.? In interim get active politically, vote, and make government accountable, responsible and efficient to help prevent the disaster.?? I doubt Washington has gotten the message though!? I hope you do.? Your family is depending on it.
Frank Ryan, CPA specializes in corporate restructuring and lectures on ethics for the state CPA societies.? Frank is a retired Colonel in the Marine Corps Reserve and served in Iraq and briefly in Afghanistan.? He is on numerous boards of publicly traded and non-profit organizations.? He can be reached at FRYAN1951@aol.com
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  • The analysis is frightening, but reasonable. When will the hirelings in DC learn that you cannot stimulate the public sector and expect to see any favorable results? Obama’s stimulus plan was used by the states to shore up their pension funds and salaries. Nothing went to the private, revenue generating, sector at least in my state. The result of this endeavor was basically increasing the debt even further. Until such time as the government can be educated to realize that the public sector jobs need to be cut and small business must be helped to flourish the hole that is being dug for us will keep getting deeper. It has often been said that the last great depression ended the day FDR died.

    Perhaps the voters need to be hit over the head to get their attention. There is no free lunch! Today there are those that think they are deserving of someone else’s hard earned income, free benefits and free higher education. This was promised by hope and change. The re-education of this ill-informed group is going to be difficult and frustrating. We need to start spreading the word now.

    Only the electorate can get the current mess straightened out. We must hold every elected official accountable and, for crying out loud, vote them out of office if they don’t perform. I have an extreme dislike for career politicians. Their only interest is to keep their cushy jobs, nothing more. Even watching them strutting around in DC, for me, is cause for removal.

    I am secure in the survival suggestions. I have a nagging fear, though. If the bank goes bankrupt, our funds will be seized. Will the bankruptcy court honor our total loss or will we get so much on the dollar? There is the FDIC but I have a feeling it is underfunded.

    • Dean Striker

      LOL, “when will they learn?” – obviously never. Certainly not until they must come to grips with collapse and “OMG, what Happened?” Even then many will remain in denial, right?

      Which brings me right back to our Voluntary System. We’re not creating yet another GOVERNment to Rule and eventually fail.

      One of the fixes probably needed is a Constitution, not this same thing which allows Force and is finally taking America down. I have already drafted an article on that which I hope to complete and post today. All members will be notified. Expect lively discussion on that one!

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