The U.S. economy is facing challenges on multiple fronts, with skyrocketing debt, increasing interest payments, and concerns over a potential collapse that could impact Americans deeply. With a volatile financial history and government intervention as the key line of defense, understanding the broader picture is essential. The Biden-Harris administration has been criticized for its economic policies, which some argue are creating an illusion of prosperity while endangering future generations. Here’s a breakdown of these concerns, the historical context, and potential outcomes.

The U.S. Debt Explosion

**What is the national debt?**
The national debt ($35.77 T) is the total amount of outstanding borrowing by the U.S. Federal Government accumulated over the nation’s history. Click here for latest figures

In recent weeks, U.S. debt has surged by $473 billion, pushing the total national debt to a record-breaking $35.8 trillion. This massive debt increase is equivalent to adding $1,450 of debt for every American in just three weeks. Currently, each citizen bears $103,700 in national debt—an unsustainable burden that shows no sign of easing.

Interest payments on this debt have become a significant part of the financial strain, surpassing $1 trillion in 2024. That amounts to $3,360 per American in interest alone, illustrating the weight of debt service costs on the nation. The administration's decision to keep borrowing and injecting debt into the economy has sparked concern. Critics argue this is an artificial effort to mask the reality of economic weakness, a tactic that may ultimately lead to disaster.

A Glance Back: Financial Crises in U.S. History

While the current economic landscape appears alarming, the U.S. has faced similar, if not worse, financial crises in the past. Understanding these moments of hardship helps to contextualize the current issues.

The 2008 Financial Crisis: A Near Collapse

The most recent significant financial crisis occurred in 2008. On September 16 of that year, the Reserve Primary Fund, a major money market fund, "broke the buck," meaning its value fell below $1 per share. This event sent shockwaves through the financial system, leading investors to pull billions from their accounts. The mass withdrawals threatened to freeze the U.S. economy, with a potential to halt basic operations like food deliveries and business activities.

If it weren't for the intervention of the U.S. Federal Reserve and the government, the economy might have collapsed entirely. This crisis, while severe, stopped short of total collapse thanks to emergency measures such as the government’s massive bailouts and liquidity injections.

The Great Depression: A Historic Economic Collapse

An actual collapse, however, did occur in the 1930s during the Great Depression. The stock market crash of 1929 led to widespread unemployment, business closures, and deep poverty. By 1932, one in four Americans was unemployed, and wages for the lucky few with jobs fell drastically. This catastrophic economic breakdown resulted in the migration of millions seeking work and opportunity, highlighting the severe human costs of an economic collapse.

Other Notable Crises: Recessions, Stagflation, and More

Other economic crises have also shaken the U.S., though none matched the devastation of the Great Depression:

1970s Stagflation: Triggered by the OPEC oil embargo and the end of the gold standard, inflation reached double digits, while unemployment soared.
1981 Recession: High interest rates imposed by the Fed to control inflation resulted in the worst recession since the Great Depression.
1989 Savings and Loan Crisis: Mismanagement and real estate speculation caused a banking crisis that forced the government to step in with a $124 billion bailout.
Post-9/11 Recession: The 2001 terrorist attacks led to nationwide fear, deepening the recession and pushing unemployment above 10%.

Each of these crises seemed like the end of the road at the time but was ultimately managed through a combination of government intervention, market adjustment, and time.

The Government's Role in Preventing Economic Collapse

While economic collapse is a real fear, the U.S. government has numerous tools to stave off such disasters. During past crises, government intervention has prevented total collapse, providing a safety net to ensure basic services continue and the financial system doesn't break down entirely.

Federal Reserve and Monetary Policy

One of the most important tools at the government’s disposal is the Federal Reserve’s ability to manage monetary policy. During times of crisis, the Fed can pump liquidity into the economy, buy up troubled assets, and cut interest rates to keep markets from freezing up. These measures played a crucial role in preventing the 2008 financial crisis from spiraling out of control and helped soften the blow of the COVID-19 pandemic.

Federal Deposit Insurance and Financial Stability

Another key safeguard is the Federal Deposit Insurance Corporation (FDIC), which ensures that bank deposits are protected up to a certain limit. This helps maintain public confidence in the banking system, even in the face of economic turmoil, reducing the risk of bank runs like those seen in the Great Depression.

Strategic Reserves and Military Resources

Beyond financial measures, the U.S. government has strategic reserves (such as oil) and emergency military and civil response mechanisms to prevent crises from spreading beyond the economy. For example, if an oil embargo threatens to spike energy prices, the president can release oil from the Strategic Petroleum Reserve. Likewise, Homeland Security and the U.S. military are equipped to manage crises ranging from cyberattacks to civil unrest.

What Could Happen in an Economic Collapse?

Although an economic collapse seems unlikely given the government's tools,

It’s important to understand what might happen if one were to occur. In the event of a collapse:

Access to credit would disappear, meaning no loans, mortgages, or credit cards.

Banks would close, making it difficult to withdraw money.
Supply shortages would result in skyrocketing prices for essentials like food and gas.
Utilities might shut down, leading to widespread blackouts and water shortages.

Internationally, the collapse would lead to a global flight from the U.S. dollar, further driving hyperinflation as the currency loses value. This scenario would trigger a significant downturn in global markets, as the U.S. economy is deeply interconnected with global trade.

Collapse vs. Crisis: Understanding the Difference

It’s critical to differentiate between a crisis and a collapse. The 2008 financial crisis, while devastating, was not a collapse. Millions of jobs were lost, homes were foreclosed, and banks were bailed out, but essential services continued. Economic crises often appear like the end of the world at the moment but tend to recover over time through government action, business adjustments, and market cycles.

A collapse, on the other hand, represents a total breakdown of the economy—an event that results in long-lasting chaos, much like the Great Depression. As history shows, while economic crises can cause pain, the U.S. government has shown it can often act quickly enough to avoid the worst-case scenario of a total collapse.

Conclusion: The Path Forward

As the Biden-Harris administration continues to pump debt into the economy, concerns over fiscal irresponsibility grow. The burden of debt on future generations, combined with massive interest payments, threatens long-term economic stability. However, history shows that while the U.S. may experience financial crises, the government has the tools to prevent a full-scale collapse.

Still, the pressure to reform and stabilize the U.S. economy is mounting. Proactive measures will be required to ensure that short-term political and economic gains do not come at the cost of future generations and the nation’s long-term prosperity.

Election Interference and U.S. Economic Instability: A Closer Look