What Does This Mean?

As I turned on my computer this morning, it flooded with headlines about turmoil, church shootings, financial market woes, etc... It seems that massive insurance giant, AIG, is asking for another infusion of $$ Billions.

In the AIG report prepared for federal and state legislators, AIG warned of a "casatrophic" collapse that could occur if they don't get another government bailout and are left to fail. This paragraph makes you sit up a bit;

AIG warned of turmoil around the globe if the government allowed the insurer to fail, adding “it is questionable whether the economy could tolerate another shock to the system that a failure of AIG would produce.” The value of the U.S. dollar might fall, Treasury borrowing costs could rise and the agency would face “doubts about the ability of the U.S. to support its banking system,” according to the presentation, parts of which were reported earlier by the New York Times.

So what does "collapse" even mean? What kind of turmoil around the globe? What would happen if the economy couldn't tolerate another shock?

Read Bloomberg article here; http://www.bloomberg.com/apps/news?pid=20601103&refer=us&sid=av8IskE9DZ4A

In what may prove to be foreshadowing of these answers, the TODAY SHOW this morning, had a story on the "tent cities" that are springing up in major cities all over the U.S. They opened the story with a clip from Sacramento showing hundreds of people living in tents in a field along the railroad tracks. The reporter said the last time this happened was during the Great Depression.

I don't know what "collapse" means, but I have a sore suspicion that most Americans have grown too soft to handle much of one.