Why the U.S. Economy Won’t Collapse

By Patricia A. Eldridge 3 years ago

If you want to imagine how life would be in a collapse, think back to what happened during the Great Depression, the severe global economic depression that occurred mostly during the 1930s. 

Now, the U.S. is faced with the COVID-19 related economic hardships, however, several reasons point to the recovery of the economy. This article will discuss the reasons and help you find reliable and low-cost business loans from a respectable provider.

What the U.S. Economic Collapse Would Mean

September 16, 2008 is the date when the U.S. economy almost collapsed. During that crisis, the Federal Reserve relied on its contractionary monetary tools to deal with the existing hyperinflation. Also, the Federal Reserve worked with the Treasury to provide liquidity. Now, the Federal Reserve can take the same steps. 

Because of the collapse of the U.S. economy, you’ll lose access to credit, banks would shut, and demand would be higher than the supply of food, gas, and other necessities. For local governments and utilities, the collapse would mean a lack of water and electricity. In fact, if the U.S. economy collapses, the world will get into a panic.

To be able to stay afloat during these challenging times, you need to have enough working capital. To obtain the necessary business loans, you should shop around and find an expert provider in your field. Make sure the offered rates are among the most competitive.

Reasons the U.S. Economy Won’t Collapse

This year, on March 1, 2021, the U.S. debt was more than $28 trillion. However, the current state of affairs shows that the U.S. economy won’t face a collapse. Let’s see why:

  1. The unemployment rate is dropping.  
  2. The stock market is in a recovery situation. 
  3. Though the debt-to-gross domestic product ratio is awfully affected, it can’t yet cause a collapse. 
  4. The majority of Congress members realize that because of a debt default, the country will become less credible in the financial markets. 
  5. China and Japan are the top owners of the U.S. debt, but they aren’t interested in causing a collapse.
  6. If the situation gets worse, the dollar would slowly drop and not fall into collapse.
  7. The dollar will remain the global currency.
  8. No hyperinflation will happen because of the Fed’s quantitative easing program and low fed funds.

Let’s look at some stats. Q1 of 2020 witnessed a 5% drop in growth. Q2 grew by 31.4%. However, Q3 saw a 33.4% rise after the fall. As for Q4, it rose by 4.3%. This year, Q1 witnessed 6.4% growth in the economy, as the Bureau of Economic Analysis reports. The growth is conditioned by the growing number of vaccinated people and reopening businesses. 

According to Michael Gapen, Barclays’ chief U.S. economist, the country is going through the opening stages, and the economy is getting out of the critical situation. Go through the above-mentioned reasons that speak of the recovery of the economy instead of a collapse. 

Author Bio: Michael Hollis is a Detroit native who has helped hundreds of business owners with their business loans solutions. He’s experimented with various occupations: computer programming, dog-training, accounting… But his favorite is the one he’s now doing — providing business funding for hard-working business owners across the country.