Spring Break
Solutions greatly needed for economic crisis
Sanjai Tripathi
Issue date: 2/4/09 Section: Forum
I know this column has been really gloomy lately. For weeks, it's been all about the pain of getting old and the menaces of deflation and depression we're facing.
Unfortunately, now I've got even more bad news. Not only does our economy have major economic problems in the short term, but it also has tremendous structural, long-term problems that we aren't even thinking about, but of which we will all soon be aware.
At the risk of coining a phrase, I call these issues the "triple-debt" problem. In three different significant ways, we've been living well beyond our means, and the time for payback is soon to be at hand.
I hate being the bearer of bad news.
If you could meet me in person, you'd see that I'm not all "harbinger of doom" all the time; I'm actually quite pleasant and full of qualified optimism. When I face problems, I try to solve them, rather than dwelling on them in woe. In the face of challenges like joblessness, loneliness or erectile dysfunction, I know what the answer is: you just have to keep the faith and know that things will eventually turn up.
I mention this because I want people to realize what perspective this notion of the triple-debt comes from.
The first aspect of the triple-debt is plain financial. Specifically, our nation has borrowed a tremendous amount of money to finance our way of life over the past few decades.
Because of complex macroeconomic factors, other countries have been willing to loan us money on favorable terms in the past, and we've been willing to borrow it.
This has happened at all levels in our economy: government, private industry and household. We've borrowed piles of money to finance credit card debt so we could shop more than we earn. We borrowed money to build McMansions we could barely afford. Corporations borrowed money to increase capacity and pay shareholders, and the federal government and the states have borrowed money so they could provide services in excess of those paid for by tax receipts.
Unfortunately, now I've got even more bad news. Not only does our economy have major economic problems in the short term, but it also has tremendous structural, long-term problems that we aren't even thinking about, but of which we will all soon be aware.
At the risk of coining a phrase, I call these issues the "triple-debt" problem. In three different significant ways, we've been living well beyond our means, and the time for payback is soon to be at hand.
I hate being the bearer of bad news.
If you could meet me in person, you'd see that I'm not all "harbinger of doom" all the time; I'm actually quite pleasant and full of qualified optimism. When I face problems, I try to solve them, rather than dwelling on them in woe. In the face of challenges like joblessness, loneliness or erectile dysfunction, I know what the answer is: you just have to keep the faith and know that things will eventually turn up.
I mention this because I want people to realize what perspective this notion of the triple-debt comes from.
The first aspect of the triple-debt is plain financial. Specifically, our nation has borrowed a tremendous amount of money to finance our way of life over the past few decades.
Because of complex macroeconomic factors, other countries have been willing to loan us money on favorable terms in the past, and we've been willing to borrow it.
This has happened at all levels in our economy: government, private industry and household. We've borrowed piles of money to finance credit card debt so we could shop more than we earn. We borrowed money to build McMansions we could barely afford. Corporations borrowed money to increase capacity and pay shareholders, and the federal government and the states have borrowed money so they could provide services in excess of those paid for by tax receipts.
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Viewing Comments 1 - 2 of 2
CharlyAndy
CharlyAndy
posted 2/06/09 @ 5:51 AM PST
The word "bailout" is an excellent euphemism because it obfuscates whatever it is that it refers to. I see an imge of people in a life raft with a hole in the bottom and people scoop water over the side with buckets. (Continued…)
James
posted 2/07/09 @ 6:17 PM PST
Or we could just let people keep most of what they earn. It worked in the 80s, but the liberals hate it because they want to cater to people who don't even pay taxes in order to gain votes. (Continued…)
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