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You may ask yourself
What is that beautiful house?
You may ask yourself
Where does that highway lead to?
You may ask yourself
Am I right?" Am I wrong?
You may say to yourself
My God!" what have I done?
The Talking Heads Once in a Lifetime
David Byrne's lyrics are reflective of how Americans have operated in a largely unconscious state for the last twenty years, operating on debt-oriented auto-pilot, and waking up from their materialistic stupor asking, "How did I get here?" We have taken the acquisition of material belongings so seriously that it became what we worked for. Material possessions defined who we are. When we lose these possessions we no longer have the identity that we have blindly created by collecting "things". My God, what have we done?Charles Mackay in his book Extraordinary Popular Delusions and the Madness of Crowds , written in 1841, captures the essence of what has happened in the US:
"Money, again, has often been a cause of the delusion of the multitudes. Sober nations have all at once become desperate gamblers, and risked almost their existence upon the turn of a piece of paper."
The nation had an opportunity to come to our senses with the election of George Bush in 2000. The gravity of the coming Saecular Winter could have been moderated through prudent actions taken on the fiscal, political, and defense fronts. The autumnal Unraveling is a time of foreboding and a brooding pessimism. As a howling wind begins to blow, leaves turn brown and wither, determined squirrels scurry around collecting acorns in preparation for the bitter snowy Winter ahead. The opportunity to judiciously prepare was wasted after the September 11, 2001 terrorist attack on America. The colossal overreaction to an attack by a terrorist organization consisting of a few thousand members, ensured that the coming Winter will be harsh, deadly, and more bitter than any ever experienced in U.S. history. Prudence, caution, intelligence, and sound judgment were required. Recklessness, haste, stupidity, and hubris were employed. The result was that the Crisis that arrived in 2005-2008 will be more painful and possibly fatal for the United States. The multiple wars of choice, immense housing bubble, stunning government deficits and unaddressed unfunded liabilities have created a nation weakened and unprepared for the harsh reality ahead. The Empire of Debt has reached epic proportions.
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The recklessness of our lack of preparation is reflected in the following facts:
- Total US credit market debt increased from 275% of GDP in 2000 to 365% of GDP in 2009.
- The National Debt increased from $5.7 trillion in 2000 to $13 trillion today. It is projected to reach $20 billion by 2015.
- Consumer debt has increased from $1.5 trillion in 2000 to $2.4 trillion today.
- The U.S. has spent $1 trillion since 2003 on wars of choice in Iraq and Afghanistan.
- Annual defense spending has risen from $359 billion in 2000 to $896 billion in 2010.
- Unfunded liabilities for Social Security, Medicare, and Medicaid total $106 trillion.
- There are 7 million less Americans employed today than there were in 2007.
- In 2008, Wall Street lost $42.6 billion and required middle class taxpayers to bail them out. Total compensation on Wall Street in 2009 totaled $55 billion, three times the previous high.
Michael Lewis was befuddled that his tale of greed, hubris and recklessness, written in 1987, did not deter college graduates from heading to Wall Street. It took two more decades, but the Wall Street money culture is in the process of being discredited. Americans are slowly coming to the realization that unbridled greed is not the same as capitalism. Excessively low interest rates punish savers and senior citizens, while benefitting borrowers, risk takers and Wall Street. Savings leads to investment, while borrowing leads to impoverishment. The actions taken thus far by politicians, government bureaucrats, and the Federal Reserve are the exact opposite of what was required. The next leg down in this Greater Depression will thoroughly discredit those who have promoted a money culture over those virtues that will benefit society in the long run. The current Crisis will require personal sacrifice, renewed community spirit, public consensus, and truth. Failure could prove fatal for our nation. The best of human nature must win out over greed, ignorance, and love of power. Our future hangs in the balance.
"It has always seemed strange to me" the things we admire in men, kindness and generosity, openness, honesty, understanding and feeling, are the concomitants of failure in our system. And those traits we detest, sharpness, greed, acquisitiveness, meanness, egotism and self-interest, are the traits of success. And while men admire the quality of the first they love the produce of the second." John Steinbeck
