The Rock and The Hard Place

Economic Collapse and Preparedness

Hey Preppers,

It seems to me that, nowadays, the entire financial mindset in America is changing.  In the good old days, everyone wanted to know how to get rich.  Now everyone wants to know how to keep their heads above water and survive the zombie apocalypse and the economic collapse that is sure to follow.  You can’t turn your computer on without seeing this video or that regarding the coming hard times. Economic pessimism is everywhere and there are all sorts of surveys, by reputable folk, that indicate the American people are rapidly losing faith in the U.S. economy.

48 percent of Americans believe that will likely be another great Depression, and that it might begin soon.  According to Gallup, the percentage of Americans that lack confidence in U.S. banks is now at an all-time high of 36%, compared to  just 14% of Americans less than 5 years ago.  The end result of this for most people outside of the preparedness community is fear.  Preppers might comprise a small segment of the population, but that’s changing.  Even people who are paid to be cheerleaders for the American Dream are jumping on the bandwagon, like Tony Robbins, confidence guru, and Robert Kiyosaki, author of Rich Dad, Poor Dad.  When these guys say to dump the stocks and buy food, guns and silver, you have to wonder just what’s going on?

Is a Collapse Situation Coming?

In order for society to function correctly, there has to be a measure of trust in the populace for the major institutions that hold society together.  That trust, and the trust that people even have of each other, seems to be eroding more and more each year.  More and more people around the world are suspicious of their own governments, and the ability of those governments to provide for the common good, whether they’re capitalists or socialists.

Once confidence in our major institutions is gone, it’s nearly impossible to get it back.The American people are becoming increasingly dissatisfied with an economic system where the vast majority of the rewards flow to large corporations and the ultra-rich.  In 1975, the top 0.1% of the U.S. population accounted for 2.6% of the nation’s earnings.  30 years later, they were taking home 10.4%.  The Washington Post says that, after adjusting for inflation, the average income of the top 0.1% of all Americans jumped by 385 percent between 1970 and 2008 while the average income for the bottom 90 percent DROPPED by one percent.  A widening gap between the poor and the wealthy is not a formula for national stability.

Meanwhile, the debt continues to skyrocket. Right now, U.S. government debt is expanding at a rate of $40,000 per second.  That’s just plain scary, But if we stop this debt cold turkey, it would throw the U.S. economy into an  economic crisis that might be worse than what we are experiencing right now.  That’s why politicians on either side of the aisle don’t have the intestinal fortitude to do it, even if it is probably the only way we can get out of the hole we dug ourselves.  The American population and those of many other countries are so used to relying on the government to make their lives comfortable, we can’t be weaned off of it.  Once the government gives us a service or benefit, it’s almost impossible to remove.  Why?  Because the recipients of that benefit or service will campaign and vote aggressively for keeping it, even if it’s ruinous for the rest of the country.  We know we can’t sustain ourselves financially as we are, but we’re afraid of what austerity programs will take away from us. The recent protests in various European countries are just an example of what we could expect here. 

When the government entitles us to a public service, it’s kind of a juggling act.   They balance  the coverage you get, how much if anything it will cost you, and what choices you will have.  If they give you more choices, it’ll cost you more, or you’ll get less coverage.  If they increase your coverage, you’ll have less choices.  If they decrease costs, you’ll probably get less choices and less coverage.  If one of the three improves, the other two will usually get worse.  This is what I call being between a rock and a hard place!

Take Great Britain, for example.  The British government offers universal coverage but, to control costs, has to severely limit your choices of hospitals and doctors.  The American health system is not universal, but you have MORE choices, but it costs you more to have that freedom.  Once the costs get very high, we might begin to see the beginning of rationing.  If something can’t be eliminated completely, the government can control how it’s dispensed.  We saw a lot of this in the U.S. during WWII.   Food, gas, medical care, pension benefits, even cash has been rationed in one country or another even today. Even more strategically important is the rationing of power and energy.  When it comes to this, the government will decide who gets it: hospitals, factories, law enforcement will all get it before you do. 

Any of this happening would be a culture shock to the majority of people in this country.  Decades of prosperity have accustomed us to having unlimited choices.  There’s 31 flavors at Baskin Robbins ice cream, for example.  Even when you go to a restaurant, if you don’t see exactly what you want in the menu, you tell the waiter you’d like it cooked this way instead, or with this side dish instead of that.  If you’re used to this, you’ll have a conniption if rationing ever comes to town.

Maybe most people will freak out, but we preppers can see what’s coming.  If pep-talk gurus are starting to sock away food and medical supplies,  you should too.  Think about it:  Even if prices go up, everything you need to succeed in times of trouble is still available for purchase.  You can buy as much as you’re willing to pay for.  That might not be the case forever.  And although prices are higher, all these things will never be cheaper than they are right now.  Talk advantage of that fact, and you and your family will do well.

Dr. Bones

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