A Bigger Crisis Is On The Horizon And It Will Last For Decades

As the news talks about enforcing mandatory lockdowns and handing out money to citizens There has been a problem that has been rapidly expanding in the background of all of this news And It is a problem that the world has never really seen before In fact it might create a crisis that won t just be felt in the next week the next month or even the next year but it might be felt for several decades to come During World War 2 Britain was in the thick of war against the axis powers However Britain ran into a roadblock they were quickly running out of money So they began looking to borrow money from both their own future taxpayers as well as the United States Canada In 1941 Britain began accepting loans and taking on debt to fund the war and by 1945 Britain had taken on nearly 10 Billion dollars worth of debt from its creditors At this point in time Britains debt to GDP ratio was a whopping 200 meaning that the country had twice as much debt as its entire market value of all its goods and services it produces over an entire year And just some perspective for you is that the World Bank states that once a country reaches above 77 debt to GDP ratio its economy will begin to slow down from such a large portion of its revenue going towards paying down its debt Anyways after the war ended Britain had amassed a debt that was so large that they couldn t pay it back in 1 year 5 years 10 years or even 20 years On December 29 2006 Britain made its last repayment on its World War 2 debt to The United States and Canada This means that British taxpayers from 1945 up until 2006 had a small portion of their tax bill every year go towards the Debt that the country accumulated in the 1940 s And for about a decade after the war Britains economy was drastically hindered in part due to their outstanding debt that they incurred However their economy eventually recovered thanks to an influx of taxpayers called the baby boomers as well as some economic reforms and infrastructure investments But a lot of the times when a country accrues as much debt as britain did they are not so lucky In 2001 Argentina s debt to GDP ratio reached a high of 166 which caused the country to default on over 100 Billion dollars worth of debt This default made capital move out of the country and soon the nation saw millions of people enter poverty while unemployment reached a high of 19 And to this day Argentina hasn t fully recovered from its debt crisis that it went through nearly 20 years ago And similar stories can be said for Greece in 2012 Zimbabwe in 2006 Venezuala in 2017 and Russia in 1998 The point I am trying to make here is that even though debt can be a good thing to take on in order to solve today s serious problems it will almost always have serious long-term consequences that could last for years or even decades So now lets bring this back to the United States So whether you know it or not America essentially runs on debt Historically America s economy has been so big and has grown so fast that taking out tens of billions of debt here or there hasn t really been much of a big deal because it was such a small percentage of the countries overall Economy For example In 2006 The United States had a relatively healthy Debt to GDP ratio of about 60 But then the financial crisis hit During the financial crisis the United states began scrambling for ways to pump money back into the economy so it began taking out hundreds of billions of dollars worth of debt And some people might think that The United States along with every other country that took out debt to get through the financial crisis has paid off some of their debt since 2008 But actually the opposite of that is true You see since the financial crisis many developed countries throughout the world have been accruing more and more debt every year while economic growth has slowed This means that many countries may actually find it more difficult to pay off their debt now than they did during the financial crisis

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