Debt worldwide is at apocalyptic and record levels. At this point in human history, we are seeing governments, private companies, and citizens take on record levels of debt during this crisis, and it’s all compounding into a global epidemic that could implode at any moment.
The Eurozone is no different and having a debt crisis of their own and it affects the already dramatically strained United States economy. One dip in economic stability in any area can create a ripple effect that goes much deeper than anyone cares to imagine. According to Dynamic Business, thanks to the creation of the IMF (International Monetary Fund) after the end of World War 2, the Eurozone’s problems have become the U.S.’s problems.
The U.S. essentially pays for 40% of the IMF’s funding. The IMF is charged with bailing out failing economies. That means Americans, who are already burdened by record levels of debt themselves, are responsible for bailing out heavily indebted European countries. The U.S. takes the money they pay to the IMF directly from the taxpayer and with 78% Americans already living paycheck to paycheck, taking on other nation’s debts could destroy the standard of living for a vast majority of the country.
Additionally, it’s not just the events in Greece and elsewhere across Europe that should have the debt-laden American worried. The U.S. should take a long hard look at the Eurozone’s catastrophic debt crisis timeline and learn from it. According to a report by Daily FX, each gradual stage of the current crisis made things continually worse, but it also provides information on how to prevent something similar occurring in the US. However, the problem is complicated further when the connected nature of global economies is taken into account.
The U.S. might not be able to help bail out any other country as the national debt has skyrocketed pushing the nation ever closer to a collapse of their own making. Living beyond one’s means for far too long will eventually come to a head and once it does, it may not be possible for any country to bail out another if none of them have money.