Bankrupt America: A Fragile Nation Grappling With Unprecedented Debt Problems

Authored by Michael Snyder via The Economic Collapse blog,

America, you officially have a debt problem, and I am not just talking about the national debt. 

Consumer bankruptcies are surging, corporate debt has doubled since the last financial crisis, state and local government debt loads have never been higher, and the federal government has been adding more than a trillion dollars a year to the federal debt ever since Barack Obama entered the White House. 

We have been on the greatest debt binge in human history, and it has enabled us to enjoy our ridiculously high standard of living for far longer than we deserved.  Many of us have been sounding the alarm about our debt problem for a very long time, but now even the mainstream news is freaking out about it.  I have a feeling that they just want something else to hammer President Trump over the head with, but they are actually speaking the truth when they say that we are facing an unprecedented debt crisis.

For example, the New York Times just published a piece that discussed the fact that the bankruptcy rate among retirees is about three times higher than it was in 1991…

For a rapidly growing share of older Americans, traditional ideas about life in retirement are being upended by a dismal reality: bankruptcy.

The signs of potential trouble — vanishing pensions, soaring medical expenses, inadequate savings — have been building for years. Now, new research sheds light on the scope of the problem: The rate of people 65 and older filing for bankruptcy is three times what it was in 1991, the study found, and the same group accounts for a far greater share of all filers.

Infographic: Bankruptcy Surging Among Older Americans | Statista

You will find more infographics at Statista

Overall, Baby Boomers are doing a whole lot better financially than the generations coming after them, and so this is very troubling news.

And here is another very troubling fact from that same article

Not only are more older people seeking relief through bankruptcy, but they also represent a widening slice of all filers: 12.2 percent of filers are now 65 or older, up from 2.1 percent in 1991.

The jump is so pronounced, the study says, that the aging of the baby boom generation cannot explain it.

Of course it isn’t just Baby Boomers that are drowning in debt.

Collectively, U.S. households are 13.15 trillion dollars in debt, which is the highest level in American history.

All over the nation, companies are also going bankrupt at a staggering pace.  This week we learned that the biggest mattress retailer in the entire country “Is considering a potential bankruptcy filing”

Mattress Firm Inc, the largest U.S. mattress retailer, is considering a potential bankruptcy filing as it seeks ways to get out of costly store leases and shut some of its 3,000 locations that are losing money, people familiar with the matter said.

Mattress Firm’s deliberations offer the latest example of a U.S. brick-and-mortar retailer struggling financially amid competition from e-commerce firms such as Inc (AMZN.O).

We have seen retailer after retailer go down, and it is being projected that this will be the worst year for retail store closings ever.

But it isn’t just retailers that are hurting.  Yesterday, I came across an article about a television manufacturer in South Carolina that just had to lay off “94 percent of their workforce”

A TV manufacturer based in South Carolina have blamed Trump’s trade tariffs for laying off 94 percent of their workforce.

Element Electronics now has just eight employees in their company after letting 126 members of staff go.

They said the tariffs imposed on goods from China mean they can no longer buy essential components for their TVs.

During this next economic downturn, I believe that we are going to see the biggest wave of corporate bankruptcies that this country has ever seen.

State and local governments don’t go bankrupt, but they are drowning in debt as well.  State and local government debt has ballooned to the highest levels on record in recent years, and one of the big reasons for this is because we are facing a coming pension crisis that threatens to absolutely overwhelm us

Many cities and states can no longer afford the unsustainable retirement promises made to millions of public workers over many years. By one estimate they are short $5 trillion, an amount that is roughly equal to the output of the world’s third-largest economy.

Certain pension funds face the prospect of insolvency unless governments increase taxes, divert funds or persuade workers to relinquish money they are owed. It is increasingly likely that retirees, as well as new workers, will be forced to take deeper benefit cuts.

Meanwhile, the federal government continues to engage in incredibly reckless financial behavior.  When Barack Obama was elected, we were 10 trillion dollars in debt, and now we are 21 trillion dollars in debt.

What that means is that we have been adding more than a trillion dollars to the national debt per year since 2008, and we continue to steal more than 100 million dollars every single hour of every single day from future generations of Americans.

And even though the Republicans have been in control in Washington, very few of our leaders seem to want to alter the trajectory that we are on.  But if something is not done, absolute disaster is a certainty.  At this point, it is being projected that our debt will reach 30 trillion dollars by 2028 if we stay on this current path.  It would be difficult to overstate the grave danger that we are facing, but nothing is being done to turn things around.  Here are some more projections from the Congressional Budget Office

In 2022, the Highway Trust Fund will run out of full funding. In 2026, the Medicare Hospital Insurance Trust Fund follows. In 2032, the Social Security trust fund surpluses run dry, and all beneficiaries regardless of age or income level will face a 21 percent across-the-board benefit cut. Before 2030, we could have trillion-dollar annual interest payments. Interest rates have been low until now, but that is changing. As rates go up, we have to pay more on new debt and on all accumulated debt.

The amount we pay in interest on the debt is set to triple over the next ten years. But if interest rates rise just 1 point higher than expected, the government will owe an extra $1.9 trillion over 10 years.

On top of everything else, everyone else around the world has been on a massive debt binge as well.

Total global debt is well above 200 trillion dollars, and it has nearly quadrupled over the past 17 years.

Are you starting to understand why they call this a “debt bubble”?

Unfortunately, all debt bubbles must burst eventually, and the one that we are in right now is definitely on borrowed time.


J S Bach Thu, 08/09/2018 - 17:07 Permalink

America was doomed to bankruptcy with the advent of the The Fed in 1913.

Had the U.S. dollar not been granted "World Currency" status with Bretton Woods in 1944, this bankruptcy would have happened a lot sooner.  We've been siphoning "wealth" off of the world's nations ever since that time... and the day of reckoning is nigh.  Let us not forget those (((international forces))) who bestowed this usurious counterfeit system upon us and the rest of humanity.  Let us pay them back in full for their magnanimity.

Baron von Bud Free This Thu, 08/09/2018 - 17:25 Permalink

I have no debt. I live in a super nice house on acres of land and have more than enough cash flow. My neighbor went broke and maybe killed himself. 100mph and no seat belt into a concrete wall does look suspicious. The secret is to live cheap until you get old. If the kids think you're broke and friends laugh at your ride then you're on the right track.

In reply to by Free This

RobertC JRobby Thu, 08/09/2018 - 19:15 Permalink

We have a Curtis Mathes console collecting dust next to the Magnavox console in my parents a kid I remember them being shitty, expensive boxes.  Boy did we rejoice when my dad bought a smaller Sony Trinitron...ROCK SOLID unit that eventually was donated because it was too small to be survived several more military move and still worked though!

In reply to by JRobby

oddjob Free This Thu, 08/09/2018 - 18:19 Permalink

No , Jews are nothing special, get over yourself. They are equally deluded as the next bunch of quacks chanting in a dark room to a  different fictional entity.

And as for relevance, Bandgap's motto was helping his neighbor, not stealing their land. And then you came along with that ridiculously patronizing comment agreeing with him while your posting record clearly indicates otherwise.

And as for what you think you are accomplishing here on ZH, its a weak effort and more over you are too late, most of the good ones are gone, hopefully enlightening people elsewhere, so now scurry off and find that place to spread your vile poison there too.


In reply to by Free This

attah-boy-Luther BandGap Thu, 08/09/2018 - 20:05 Permalink


most of my neighbors are old-er.

So when they need help on their land, I'm there. In my mid-60's I'm younger then most. We all will get there.

I invested in quality tractor, farm implements and truck. ROI is steady versus K $treet.

Each day I use equipment for our land or help others it pays dividends. Urban rats will eventually consume themselves.

cultural marxism-mission accomplished. Thank you joo-wurl-odor.

One day you self-deceived snobs will stand before the ultimate judge.

In reply to by BandGap

roddy6667 Baron von Bud Thu, 08/09/2018 - 20:00 Permalink

I too retired with no debt and a nice home. When I was working my co-workers, mostly blue collar and lower, would snicker at my high mileage (but dependable) Camry parked next to their flashy SUV or sporty wheels. I had no payments and low insurance. They paid over $700 a month. They will always be broke. We lived beneath our means, saving $30,000 a year. 

In reply to by Baron von Bud

Antifaschistische nope-1004 Thu, 08/09/2018 - 17:25 Permalink

when Mattress Firm started offering 8 year financing on a damn mattress you knew they had squeezed just about as much blood out of their consumers as they could possibly squeeze.

Original Home Mortgages were 7 years.

Those were the good old days, when a young couple paid off their first house in 7 years and upgraded homes before they had their 4th child, THEN paid off the second house before the first kid entered high school....ah, the good ole days.

In reply to by nope-1004

Killdo Antifaschistische Thu, 08/09/2018 - 20:51 Permalink

I once went with a friend to help him pick a mattress - he ended up buying a top of the range Tempur pedic. It was very interesting to hear the games they play with customers. I.e. they keep changing a stitching design on their tempurpedic covers (and then they try to persuade you to buy the 'previous ' model - basically the exact same thing with a different stiching pattern. It's a bit cheaper but you weave your right to return the mattress if you don't like it. 

I think he paid about 3k for a queen size with a motorized base (that probably costs less than 50$ to make) . I wanted to see how the mattress was constructed so I opened it. Inside there were 3 layers of the cheapest foam and only the top 2 inches were the actual tempur pedic foam - the whole thing probably costs a couple of dollars to make in China. 

They also said to not wash the cover (probably because it was soaked in fire retardant crap as per California law) - I put it in a washing machine -and it did not shrink at all. My friend kept the bed for about 3 months then he sold it for half price and got natural latex one. 

He is a millenial from San Francisco

In reply to by Antifaschistische

lock-stick Baron von Bud Thu, 08/09/2018 - 20:10 Permalink


•• Free This (ABOVE, in all his 7th grade glory - JACKASS  as new icon!)

•• MoreSun (whacked, OH SO WHACKED!!)

•• Monad  (AnonQ Live Action Figure)

•• Adolfsteinbergovitch ("I TORMENT THE WOMAN WHO SUCKS DICK!")



•• Cryptopithicus Homme (bitcoin spammer - imaginary "friend")

•• Leakanthrophy (PORN for Jesus!)


•• Africoman

•• Sanctificado

•• beemasters

•• PrivetHedge

•• Cheolli

•• bobcatz

dozens and dozens and dozens of banned log-on's -- more than seven years!


....and all the while, the pathetic little SPAMMER sits in his leaky, moldy, smelly single wide in Western New York, surrounded by garbage and dirty clothes, trying to find his dick amidst rolls of fat, talking to his ACTION FIGURES and wondering where his life went.



•• Adolfsteinbergovitch ("I TORMENT THE WOMAN WHO SUCKS DICK!")

In reply to by Baron von Bud