It is true, that if Americans did not live beyond their means
for so long, the world would not have developed so rapidly.
In addition, I doubt Jim Rogers is right. The present Americans
are beginning to worry, which is a good thing. At the present
state, I highly doubt they are not able to repay their
debt. 3 factors that I see:
1) The US, on paper, has the biggest amount of gold in the
world. I remember it was 3000+ tonnes, but let's just say we take a
simple number of 3000 tonnes
2) The US has the largest estimated untapped oil reserves in the
world. Estimates put that at 2.3 trillion barrels of oil.
3) Taxes can still be played around with. If they stop this
bickering, and move to have a better tax structure
(read simplified), it will help them immensely in better tax
collection, hence removing the need to increase taxes and just
focus on better tax collection.
If you assume that US sells its gold of 1500 tonnes, at today's
prices of US$1700.00 per oz, US has a total of 50,000,000 oz (1500
tonnes x 1000 kg x 1000g / 30g where 30g = 1 oz) =
US$85,000,000,000. That's $85 billion.
If the US drills half of its oil reserves out, for simple
estimates, let's say 1 trillion barrels of oil, where 1 barrel of
oil is for simplicity factor = US$80, the US can generate $80
trillion. Removing the estimated cost of drilling, labor, selling,
etc, let's put it at 50% cost, it's still $40 trillion.
Increased efficiency in tax collection will help them to better
handle their annual budget, thus leaving their natural reserves to
pay off their debts. The current US debt is $17.3 trillion. Given
its natural reserves, it can pay back its debt.
It's the right thing to do though, to manage its debt, because
the dumb presidents add > $1 trillion debt to the total debt
every year.
At the rate they are going, in 20 years, if the US does not rein
in its debt, it will indeed become a really serious situation.
That's when Jim Rogers may be right.