Inflation is up, the contents of our shopping carts are down. We seem to be marching out of the throes of the pandemic into the arms of an increasingly fragile economy. Is economic collapse on our horizon? What does that even mean? And how will we survive it?
What is Economic Collapse?
One of the first acronyms I learned as a new prepper was TEOTWAWKI. The End Of The World As We Know It. I knew from reading James Rawles’ Patriots that the end could come suddenly, within just a few days, as America’s banking system collapsed upon itself. Another, more drastic version was spelled out for me in an online article, “The One Hour Meltdown.” Neither vision of the future was pleasant, but I was skeptical about the concept of a sudden economic collapse.
According to Investopedia, an economic collapse happens after a season of crisis and at the “onset of a severe version of an economic contraction, depression, or recession and can last any number of years depending on the severity of the circumstances.” It can occur quickly because of a precipitating event or after several events highlighting weak links in the economy.
I’m inclined to see that a slow decline, a de-evolution, of our lifestyles and our economy may be far more likely. Continued high levels of unemployment, for example, are eroding away at America’s middle class. Worse still, is the fact that long-term joblessness causes individuals and families to exhaust their savings, retirement funds, and max out credit cards in their attempt to stave off bankruptcy, evictions, and home foreclosures.
As each safety net is consumed, people become more and more entrenched in the growing underclass, and in today’s economy, it’s going to be more difficult than ever to recoup what has been lost. TEOTWAWKI has become a reality for millions of Americans, and the slow decay continues.
What Do The Numbers Say?
In 2021, around 37.9 million Americans are living below the poverty level, measured by an income of $26,500 or less for a family of four. The median income has decreased to levels seen in the mid-1990’s. According to the federal government, the unemployment level is 3.8%.
The unemployment rate depends largely on where you live and the health of local business and industry. Many industries (except Amazon) took hits during the pandemic. And now, businesses seem hard put to find employees. Many have resorted to altering business hours because of their diminished workforce. I recently bought a new washer, and the family-owned business is no longer open on weekends because they don’t have enough staff.
READ MORE: Do you know what the actual poverty levels are for different-sized families? Here is a table that provides that information.
In November 2022, 100.44 million people were counted as part of the “inactive labor force.” One in nine men between 25 and 54 years old, and one in five between their early 20s and mid- to late 60s, isn’t working – conservatively, three times the comparable figure in 1960, says one institute. Today, only 44% of Americans consider themselves to be “middle class,” down from 53% in 2008, and, incredibly, 49% believe they are “lower class.”
The average age of a worker earning just minimum wage is 35. 45% of American workers make less than $30,000.No wonder American families are hurting.
READ MORE: Coping with a personal financial crisis? I wrote this just for you.
Bottom line: Americans are earning less and working less. And this leaves millions of us more vulnerable than ever to an economic collapse.
Which Is More Tragic: Slow Decline or Sudden Collapse?
A slow decline of a society is more sad and tragic than a sudden collapse. After all, what is the more awful to watch, an animal dropping dead from a single rifle shot or one that lumbers along in pain from a not-quite-mortal wound, finally dropping, exhausted, miles away? At some point in the future, we’ll wake up and realize that our American economy has been lumbering and finally collapsed. TEOTWAWKI isn’t always sudden. Sometimes it’s slow and sad.
Back when Russia was the USSR and the Iron Curtain was firmly in place, I traveled through such glamour spots as East Berlin, Belgrade, and Leningrad (now St. Petersburg). I was struck by the widespread poverty, from patched-up cars from the 1950s to equally antiquated fashions. Grocery stores were virtually empty, the scarce goods available were poor quality, technology was ancient as vendors used abacuses to calculate sales, and only a very few people at the top of the food chain enjoyed the comforts I took for granted. When I think of a slow collapse of America, this is the snapshot that comes to mind.
Homelessness is an increasing challenge, granted in some areas more than others. Recent reports tell of record numbers of Americans resorting to dumpster diving to find food. Preppers and survivalists with deep pantries filled with buckets of wheat, SPAM, and soup will be spared that indignity!
READ MORE: Dumpster diving requires more skills than you might think!
We are currently in a small window of time in which we can prepare our families for an economic collapse, whether it happens in one day or continues far into the future, “lost decades,” as they say. The concept of preparedness is based on taking steps before a crisis to ensure your family’s well-being afterward.
Proactive Steps In The Face Of Economic Collapse
- If you’re relying on a solvent Social Security system to see you through your retirement years, you’re already in trouble. If the government gives it to you, they can take it away. What can you do to earn more money on the side to invest in hard goods, such as food storage, possibly precious metals, or moving to an area that is less populated?
- However, for the time being, DO take advantage of any and all forms of government assistance if you qualify. You paid into the system; you might as well get the help you need as long as the federal government remains solvent.
- Give a lot of serious thought to how you might earn extra money. Assess your bank of skills and knowledge. How you can leverage them to start a small business out of your home? I started this blog when I was in my later 40’s — so don’t use age as an excuse to not try something new!
- Review every expense paid by cash or debit and anything paid for with a credit card. Slash and burn unnecessary expenses. It’s surprising how little we actually need, even though cutting out beloved expenses can be painful. I cried when I had to cancel my son’s guitar lessons, but our family budget couldn’t handle the expense any longer. Happily, I was able to find free lessons online.
- Set aside a few months’ worth of food suitable for long-term storage, and then continue stocking up. If your food is stored safely and correctly, there’s really no such thing as having too much since you can always share with others.
- Fuel prices will be volatile, and car upkeep and insurance are always dependable money drains. What can you do now to minimize your dependence on car travel? Can you switch to doctors, stores, and businesses within walking or bicycling distance? We’ve all experienced high gas prices this year. Although some areas are seeing relief, fuel is still a huge expense in many budgets. Imagine, now, what you can do if that happens again, or if fuel is not available at all, and begin making changes accordingly.
- As with fuel, energy prices are also turbulent. The appliances in your home that use the most electricity are your air conditioner, heater, water heater, and stove. Do you have more than one way to cook food and heat water to save on the monthly bill? What about staying warm in the winter and cool in the summer? Excessively high rates for power are common in countries with struggling economies, so having a plan and the right supplies is crucial.
- Don’t count on solar. It continues to be prohibitively expensive, even with government and power company assistance. It takes a decade or more to recoup the expense of a whole-house solar system, and the electronic components are susceptible to EMP. You’re better off buying smaller solar-powered products such as battery chargers, a solar oven, or a solar-powered refrigerator, although that, too, is costly.
- Learn how to produce some of your own food by gardening and raising whatever livestock your circumstances allow. Read this post for our best master gardener tips. Plus, backyard chickens have become so popular that many towns and cities are revising their regulations to allow chickens and in some cases, other animals, including bees.
- Pay off debt and tackle the mortgage. Remember, farmers in the Great Depression lost their farms because they couldn’t make the payments. Sometimes, it was because they couldn’t pay the property tax. Even adding $50 or $100 to a mortgage payment reduces the principal. If your home is free and clear, start a monthly savings plan to promptly pay the annual property tax bill.
- Save money. Even if the dollar should be devalued, paper money will still have some value. It would be better to have $5000 in a devalued dollar than nothing at all! Even if such an extreme scenario never occurs, the average period of unemployment is approaching one year. Anything in savings will, literally, buy you and your family time as you seek employment and other sources of income. This 52 Weeks Savings Plan is adaptable to many situations and you can start at any time of year.
- Become frugal now. Learn how to pinch a penny until Abe screams for help! Whatever money you have in savings will last a lot longer if you do.
- Consider investing in precious metals. No, you can’t eat gold or silver, but precious metals have always been of value.
- Don’t count on bartering as a lifestyle. Remember that for a barter exchange to be successful, you must have what the other person wants or needs. What if all you have are airplane bottles of whiskey, and I’m a non-drinker? Do you really think I will trade my food or medical supplies for your booze? There’s definitely a place for bartering, but too many people see it as the solution rather than a possible option.
- Stay up to date with dental and medical issues. Drastic changes to our health care system have already happened, with more to come. If our economy continues its downward slide, only the very wealthy and well-connected will be able to have top-notch medical care on demand. If you’ve been putting off the annual physical, surgery, or any other procedure, it’s time to make the call, set the appointment, and take care of it.
- Get in shape. Not the most popular of survival topics, but if you are at a healthy weight and in average to above-average shape, you’ve already improved your health, making medical issues less likely.
A Final Word About An Economic Meltdown
The worst part about an economic collapse is the unfairness of it all, and that brings me to my final and most important tip. Guard your mind and your heart against bitterness and anger. Hundreds of thousands of hard-working, responsible Americans have lost homes and property because of monetary policy made by those in government, finance, and business who continue to live in luxury.
Survival begins with a positive mental attitude, but anger and resentment consume energy, cause depression, and increase feelings of victimhood. Instead, make the decision to be proactive and self-reliant. When you do that, you’ve taken power away from those you resent and have empowered yourself. That’s a sign of a true survivor who’s ready to face whatever comes.
Last updated on December 18, 2022 by the Survival Mom editors.