A Sea of Debt

Clouds Lie Ahead

For Years to Come,

But We Knew That



As the holidays approach, people are speaking broadly about the past year and what lies ahead for 2011.

There is a sense of wariness, if not pessimism, which colors our views of the future, at least as far as public issues are concerned. Individuals' personal outlooks vary widely, depending first on their own physical and mental health, then on personal economic issues, the most important being: are you employed, are you earning enough to support yourself and your family, and what is the likelihood of your remaining employed, or at least, marketable? In other years, issues of job satisfaction were more on people's minds, like am I doing what I really want to do? In these times, the focus is more on the availability of employment than the level of fulfillment it may provide.

The statistic of 9.8% employment is somewhat of an underestimate of the state of the economy. It does not count the underemployed, or the people who have given up looking for jobs and dropped out of the labor market. Unemployment remains high when the stock market and corporate profits are rising, so it is not as if a shrinking economy is to blame. It seems that America needs fewer workers than it used to, and that much of the unemployment is becoming structural, and therefore less likely to be cured when economic conditions improve.

Another concern of individuals is reflected in their belief that conditions will be more difficult for their children to deal with than they were for the parents. Upward social and economic mobility has been taken for granted in America for generations, particularly in immigrant communities. For the first time, many people are uncertain that the next generation will be able to get into the schools they did, or hold the jobs they have, or buy homes equivalent to those in which they live. This pressure is particularly acute on the middle class, or people who have good jobs in manufacturing, or on the lower levels of middle management. NAFTA and robotics may add to premonitory feelings of anxiety.

We don't think too much about issues like how the next generation, or the ones after that, will pay off the ever-increasing national debt, or pay the interest that accrues annually on the $13.56 trillion public debt of the Federal government (as of 9/30/10). As we write, the real time estimate of the US debt clock is $13 trillion 827 billion 777 million (rising at several million dollars a minute). Click here to see what the debt clock indicates at the moment you view this link.

We should also think of the balance of payments between imports and exports, under which the United States for years has paid more for the goods it imports than it has received from the goods it sells abroad. That is another trend that cannot continue indefinitely, yet it shows no sign of abating.

In the last few days, the controversy between President Obama and the Republican leadership in Congress appears to have led to a compromise, which is the only alternative to inaction, neither side having enough votes to pass anything.

However, both the Democratic and the Republican plans are supposed to be paid for by increasing the national debt. The parties differed widely as to which category of taxpayers should get relief, and the Democrats succeeded in winning a year’s extension of unemployment insurance, which seems increasingly necessary as the recession continues, but which does not result in increasing employment.

The sensible compromise, which appears to be on track, was intended to resolve those differences. However, the accommodation of the parties came at the expense of the future. If we believe that the growing debt will ever be repaid or substantially reduced, we have postponed the time when that might happen.

There are many other reasons to be concerned about the future. Nuclear proliferation is the most obvious and threatening. The mental stability of some leaders of states with weapons of mass destruction is questionable. However, the leaders are not suicidal. The problem is more severe when non-state actors acquire nuclear weapons, which is probably only a matter of time, as North Korea may place parts of its arsenal on sale – in mint condition and never used.

To us, these problems arise from the rapid advances in the physical sciences made in the last few centuries, rushing far ahead of the behavioral sciences. It has taken billions of years for our species to evolve into what it is now, and we cannot expect substantial change in the handful of generations that may remain before, as my mother used to say, "anything happens."

Enjoy the holidays. Rule 26-G: "Every day we live is a gift of God." We add: "Try to earn the gift by good works."