Is the Party Over? The potential American economic downfall

I've been keeping this to myself for a bit now, mainly because I really didn't want to say it myself, specifically because I've been hoping I might be wrong. But one thing has been resonating in the back of my mind for some time now, even before the financial crisis hit, and that's a tie to the infamous argument of how Reagan "beat" the Soviet Union by pretty much bankrupting them. One thing always bothered me about that connection because I kept thinking to myself that we were doing the increasing in budget at the same time as the Soviets, and we kept selling it as "we're America and can handle the increase in spending", but I always felt that wasn't true. I always felt that there was a saturation point we surpassed during this conflict, and that once something happened that challenged our financial capability, the whole thing would start crumbling down like a house of cards, kind of like happened to the old Soviet Union.

But I kept wanting to think that the economists were smarter than me, that they figured this all out, that my minimal understanding of economics was obviously not filling in enough information. And now I fear that I may have been right, even though I don't want to be right. I want to be wrong so badly right now, but I believe we may be seeing the beginning signs of our economic downfall, and that we'll never accept it until we're too far past the ability to maintain our cohesive bonding.

My fear is that we not only brought down the Soviet Union, but we also brought down ourselves as well. It just took longer for us to succumb to the process.

I suspect there are all sorts of Keynesian and Smithian responses to explain why this is not the case, and of course add in the inevitable Chicken Little reference, but I'm having a harder time distancing myself from this potential circumstance.

Stumble It!