The Fiscal Cliff Will Cause Many to File Bankruptcy

There has been a lot on the news about the United States going over the fiscal cliff again. Back in October when Congress wouldn’t agree to the demands of the White House, there was a stalemate in the federal government shut down. That’s at least what they said. In actuality, it was more a matter of the White House selecting people to punish for Congress’s actions. In reality, that month the government spent $600 billion. That doesn’t sound much like a shutdown to me. Most Americans don’t even understand what is really going on here and how the US got in this situation. The Democrats are saying that we need to raise taxes so the US will be able to continue on down the path it is going. What most people don’t realize is for the last four years the government has been running a $1 trillion deficit every year and that’s from their numbers. If the government didn’t have the ability to print their way out of debt, the US would’ve defaulted a long time ago. Currently with QE4, the Fed is printing $85 billion a month and buying mortgage-backed securities with that. There is now talk of QE5. When will the people we elected stand up and say enough is enough.

According to Shadow Stats, the deficit for 2013 was $6.8 trillion. According to the government, there has been only $7 trillion in debt added to the US over the last four year term of the president. And they use the word “only” lightly. Most people don’t seem to care because they don’t believe it affects them. In reality, it affects every one of us because someone is going to have to pay this debt that the government took on. It will either come directly through increased taxes or through fees and higher interest rates that will cause massive inflation. Either way it is going to send many Americans into bankruptcy.

This year the Affordable Healthcare Act and other banking legislation has been passed and going into law as this is being written. All of this will have a huge impact on the way Americans live and how they will survive in the future. When the average income of an American family is now close to $30,000 a year, it’s pretty hard to believe how adding in the cost of healthcare will help anybody. Last year, the payroll tax was increased giving people a smaller take-home paycheck. Adding all of this together will force many middle-class Americans into a bankruptcy filing. It’s almost like they’re trying to destroy the middle class rather than help it.

While all of this is going on, the mainstream media keeps showing a rosy picture of the economy and telling us how we’ve turned the corner as less Americans are now filing bankruptcy. While this number might have been reduced over the last couple years, there are reasons behind the reduction of those who file bankruptcy to eliminate their debt. One theory is, many Americans are going further into debt and kicking the can down the road to avoid filing bankruptcy. On top of that, banks have once again started lending to consumers and allowing them to run large balances on their credit cards. This is the same punch people were drinking prior to the 2007 real estate bubble and financial market collapse. We are heading down the same path that caused a record number of Americans to file bankruptcy in 2010. There is no way to fix it now and everyone needs to brace for impact. Even further, there has been talk of the US losing its reserve currencies status because of its high amount of debt. Only time will tell how all this will play out when the rest of the world decides to cut up the credit cards of the US.