Bankruptcy refers to a lawful acknowledgement of the collapse of a person or company. The control of these cases is handled by particular bankruptcy courts. The process, criteria and terms and conditions are different from state to state and rely on different factors.
It offers a solution for circumstances where debts which are outstanding cannot be met and no agreement can be reached with the creditors.
- America seems to be in big trouble because of the way it deals with its debts.
- The liberals in this country acknowledge that the US is accumulating deficits which cannot be sustained. The liberals also however, strongly refuse any efforts to be made about this.
- However, this is a natural trend when public funds are allocated towards special interests. There is a lot of collective money which not many people appreciate even when millions of money is saved. In this regard, people should be aware that this country is on the brink of going bankrupt soon, if serious measures are not taken to control spending.
What are the Repercussions of US going Bankrupt?
- Overnight, all the money you have saved all your life could be reduced to nothing. However, governments normally print more money when they are unable to pay their debts. The disadvantage with this is when you grow the supply of money, the more the money at hand loses value.
- People’s taxes will increase drastically. Governments are under the misconception that taxing the rich heavily to offset their debts will solve the problem, but this does not work. This signifies that with the increase in desperation of the government, the average American is going to be burdened with additional taxes.
- Your life will be endangered. If the government becomes bankrupt, a lot of people will be very annoyed confused and frustrated. They will lose faith in the leaders due to the bad economy and inability of the government to sustain order. In these circumstances, a lot of rioting and crimes which are violent are likely.
- The payments the government makes to you will reduce drastically or stop. Despite the beliefs of some people, Medicare and Social Security are paid from the same source which pays for other things also. What this means is that if the government goes bankrupt, there will not be any money allocated for paying these programs. Therefore, if you receive Medicare, Social Security, food stamps, welfare and other programs which are similar, this will stop.
- Your standard of living will lower dramatically. If there is an escalation of taxes and inflation, which is bound to happen if the country goes bankrupt, economic activities will slow down and the country will go into a depression. This depression would be the worst ever experienced. All businesses will close down, unemployment will rise and the government will be unable to assist.
If bankruptcy occurs in a country like America, where people have prospered for a very long period of time, this will generate a lot of misery.
It is not very enjoyable being poor, but the situation is worse when one is reduced from leading a contented life with a great future, to farming in the backyard so as to get vegetables to eat and worrying about how to generate warmth in the winter.