Skip to comments.Future tense, V: Everybody gets rich - On unwinding the welfare state.
Posted on 01/12/2012 10:17:30 PM PST by neverdem
I have been engaged in a little high-low reading in the past several months, alternating one highbrow work (e.g., Outer Dark) with one less exalted work (e.g. Lonesome Dove). My most recent pairing was the short stories of Raymond Carver, which I had not read, and Stephen King’s The Stand, which I had read as a youngster and wanted to revisit to see whether it retained any of the fascination it had on first encounter. There is a great deal going on in these works, though a great deal less going on in Mr. Carver’s stories than in Mr. King’s. In Mr. Carver’s, people in various stages of marital disintegration get drunk and behave badly. In Mr. King’s novel, well . . . there’s a secret underground government lab incubating a superplague, and a guy who’s just hit it big as a pop star, who goes home to visit his mother in the Bronx, and a General Ripper–type plotting against the Russkies, and so on. But they’re the same story, really: the story of the world ending. In Mr. Carver’s short stories, the world ends one unhappy family at a time, in The Stand the whole world takes it in the neck at once.
The thing that struck me most strongly in both works, though, wasn’t the spectacular horrors—the ravages of alcoholism, adultery, wife-beating, doomsday viruses—but the quotidian horror of economic insecurity. Mr. King was writing The Stand at the same time Mr. Carver was discovering Alcoholics Anonymous and beginning his second life, and each offers a testament to one undeniable fact about life in the late 1970s: People were poor. Americans were the richest people in the world even after Jimmy Carter got through with them, and globalization hadn’t extended to the point at which the American middle class was competing head-to-head with poor Asians, Latin Americans, and Eastern Europeans. But, damn, people were poor, at least from the point of view of 2011. There’s a bit in The Stand when the newly hatched pop star notices that his mother has gone the full fatted calf for her prodigal son, buying, among other things, two pounds of butter. He wonders how his mother, who is of quite modest means but gainfully employed and self-sufficient, was able to afford such an extravagance as two pounds of butter. Who worries about the price of butter today? A pound of butter runs, typically, about $2.50, but a careful shopper can buy a pound of butter for less than $1. Very fancy butter from Whole Foods runs less than $4 a pound. Anybody too poor to buy a pound of butter in 2011 will have a pound of butter bought for him, no questions asked.
There’s a whole economics in the price of a pound of butter: Adjusted for inflation, a pound of butter cost nearly $7 a hundred years ago, about three times what it costs today. By the time of The Stand, it was down to about $6 a pound in inflation-adjusted dollars. And it has fallen further faster. But not everywhere: In Norway, as of this writing, a combination of protectionist trade policies and bad luck has sent the cost of butter to nearly $500/pound—prosperity only emerges when governments allow it to emerge. In 1950, the typical family had to dedicate more than one-third of household income to buying groceries. Today, that number runs from 10 percent to 14 percent, and a great many households spend more eating out than they do on groceries.
I noticed a fellow at the recent Occupy Wall Street protests carrying a sign reading: “They eat filet mignon. I eat the dollar menu.” This of course says a great deal, and not at all what he meant for it to say. Here is an American man in apparently good health complaining that, while he can have a modest meal for 8 minutes and 30 seconds of work at the minimum wage in New York, (including the sales tax)—and have somebody else cook it for him, at that—he’d really rather have filet mignon, thanks very much.
I sympathize: Earning the New York minimum wage, he could report for work at 9 a.m. and by noon have earned enough to have a two-inch thick USDA prime twenty-one-day-aged filet mignon for lunch, providing he is willing to cook it himself. If he reports back to work at 1 p.m., he must then work until 3:15 p.m. to pay the rent on his modest New York City apartment ($500/month in the Bronx, via Craigslist, with hardwood floors, heat, and hot water included) and then until about 3:45 p.m. to pay for his monthly subway pass or to make the lease payment on his Kia—which, at $99 a month, is a bit less expensive than the subway pass, but then there’s gasoline and insurance to think about. The money he earns between then and 6 p.m. ought to be sufficient to cover his other meals and incidentals, if he’s thrifty, though he’ll probably need to put in a few extra shifts a month or get some overtime to keep current on his taxes.
Filet mignon every day, a private car, an apartment of his own—Mr. Minimum Wage is not only living better than most of the people currently living and 99 percent of the people who ever have lived, he’s also living substantially better than a typical American middle manager did a generation ago, to say nothing of a workingman. He must make decisions and prioritize his expenses, but his tradeoffs are between having an automobile of his own or taking the subway and having a cell phone.
It is worth taking an economic eye to one’s literature. My own childhood hero, the Count of Monte Cristo, dazzles his guests by serving fish from two distant parts of the world—a millionaire’s whim, he calls it. Alexandre Dumas simply could not have imagined a Wal-Mart big box store, which, on average, is 185,000 square feet of retail space, offering well more than 200,000 products gathered from around the world for shoppers who enjoy, without even thinking about it, riches that the Count could not have imagined: air conditioning while they shop, refrigeration to keep their food fresh, etc. Which is to say, we are not a nation of paupers. From energy used to calories consumed to travel enjoyed to the size of our houses to the variety of our diets and distractions, we are rich, rich, rich, besotted with wealth, drowning in affluence, up to our fat little earlobes in the good life. So why do we feel so poor?
Not everything has followed the economics of butter—getting more plentiful, better, and cheaper every year. Some things have out-buttered butter, of course: Our gadgets, our cell phones, much of our food, and even many of our vacations were available only to the very rich a few decades ago, if they were available at all. It is hard to imagine, watching the general public come and go through the security theater at an American airport, that air travel once was so rarified and glamorous as to produce that brilliantly evocative midcentury noun: the jet set. But some important things have not managed to keep up with the brilliant technological and economic innovation of a sophisticated product such as butter. Perhaps the most important one of those things is Leviathan, whose buttery, blubbery bulk keeps getting more expensive and less effective.
The welfare state isn’t a very good buy. The average Social Security benefit runs just over $1,100 a month—peanuts, hardly enough to keep you in cut-rate butter once your median rent of more than $800 has been paid. For that, you’re taxed 12 percent of your take-home pay. Compare that to this: A married couple, each earning the minimum wage, investing only 10 percent of their earnings at a modest 7 percent return, retires with an annual income of more than $100,000 a year—even if they never touch the $1.5 million principle they’ll leave to their children. President George W. Bush was mocked for calling his proposal to cultivate such minimum-wage millionaires the “Ownership Society,” but it was the most important initiative of his presidency. Yes, I have included the War on Terror in that estimate. Conservatives who faithfully supported President Bush’s grandiose, heart-of-gold/brain-of-cabbage program to make Anglo-Saxon republicans out of obscure desert savages left him naked and friendless in the entitlement-reform fight. But reality is not optional: Just as the ghost of George W. Bush haunts President Barack Obama’s national-defense policy—which now incorporates such concessions to reality as open-ended Gitmo sequestrations and rendition, “enhanced” interrogations, pre-emptive warfare, and even the premeditated assassination of American citizens (something Dick Cheney never had the brass to propose, in public at least)—so does the specter of the Ownership Society lurk in the dark corners of our current fiscal crisis. Happily, it is a friendly ghost.
Winston Churchill famously observed that Americans can always be counted on to do the right thing—after exhausting every other option. Our economic and fiscal options are diminishing daily. The U.S. Treasury has now had its Pearl Harbor—the downgrade—and, as with the war against Hirohito and his wild boys, this one involves fighting a lot of zeros: for instance, the fourteen ugly aughts needed to write out our real national debt, which includes $15 trillion or so in explicit federal debt, another $100 trillion in entitlement liabilities disappeared like so many Latin American dissidents through the miracle of government accounting, several trillion in unfunded pension and health-care liabilities for government employees, trillions more in state and local debt, and several relatively trivial trillions sprinkled hither and yon. Annus domini 2012, it adds up to $130 trillion to $140 trillion. That figure is, literally, more than all the money in the world—more than every piece of currency in any denomination issued by any government, along with all of the money in the world’s checking and savings accounts, certificates of deposit, money-market funds, and other forms of ready money. About twice that, in fact. It is more than twice the annual economic output of human civilization. All of which is to say, it’s not the sort of fiscal imbalance that is going to get solved by raising taxes on Wall Street sharks or eliminating foreign-aid payments.
And this is a very excellent thing. At the risk of taking a Shining Path approach to reform, fiscal realists ought to welcome the pending crisis in American public finances with almost as much glee as dread: This is how we all get rich! Leviathan is over—so 20th century! Americans are not, in the majority, stupid. They do not wish to be paupers—and they aren’t. Three-tenths of the population is functionally illiterate, and one-tenth is so highly educated that it is capable of entertaining the most preposterous notions (check out the shelves at a New Age bookstore or revisit some of Barack Obama’s campaign materials if you doubt this), but that leaves a solid 60 percent of the people of the most prosperous and powerful nation in the history of human civilization who do not want to be poor, miserable, and vulnerable, and who have the power to reshape our ailing institutions to ensure that they are not left so. In this effort, they will get some help from unlikely quarters, including from the Chinese police state, whose masters also do not wish to see Americans impoverished and immiserated, if only for their own narrow, selfish purposes. (And who can blame them? A serious depression in the United States would send unemployment skyrocketing in China, and Chinese economic crises do not end with elections, but with massacres.)
As the U.S. Treasury runs out of money to lavish upon cowboy-poet festivals, cocaine binges for monkeys, transgressive/transsexual/transformative/dykes-against-the-gender-binary performance art evenings in Omaha, superhighways connecting nowhere with nowhere, and the like, Americans will, perforce, begin to engage in a salubrious debate about what government actually should be doing—and what it is good at doing. In terms of stuff that you really want the national state in charge of, the U.S. Marine Corps will no doubt continue to look pretty solid, and dubious grants to community-organizing rackets will not.
That debate will not be held at the federal level only. It is worth noting that total government spending in the United States is about the same as in Canada, once the states and localities are added to the mix. We do not have small government in the United States—we have dispersed and dysfunctional government. A textbook example of that phenomenon recently made headlines when the town fathers of Topeka, Kansas, voted to legalize wife-beating. Seriously: Topeka repealed its domestic-violence statute. The city of Topeka was in a pissing contest with Shawnee County, which surrounds it, over who would bear the expense of prosecuting domestic-violence cases. Shawnee County’s authorities said they no longer could afford to do so, and told Topeka it would have to prosecute the cases itself. Topeka therefore repealed its domestic-violence law, leaving the county as the only prosecutor with jurisdiction over the crime. Naturally, shock and outrage followed, with women’s advocates raising a ruckus that was, for once, well merited. They pointed to a woman who had been beaten with a crowbar and thrown through a plate-glass window by her beau. Under Kansas law, that is misdemeanor domestic violence, and budget cuts meant that misdemeanor cases are not being prosecuted. (Nobody, save your obedient servant, got around to asking: Why is beating a woman with a crowbar and throwing her through a plate-glass window a misdemeanor, rather than a felony?)
“This is what austerity looks like,” the liberal MSNBC host Chris Hayes said of the sorry situation. But of course that poor woman’s bloodied visage and her lack of recourse to the law is not the face of austerity: It is the face of government’s inability to make elementary rational decisions about the allocation of scarce resources—and resources always are by definition scarce, recession or no. Excluding its public schools, Topeka, a city of about 120,000, spends $222 million a year during these bleak days of austerity, maintains one full-time municipal employee for every ten residents, spends six-figure sums on arts funds, offers its city manager nearly $200,000 a year in compensation. The mayor’s secretary costs more than $100,000 a year to employ, while the nine employees of the city manager’s and city clerk’s offices cost an average of nearly $100,000 a head. Presumably, there are some powerful municipal-employee unions at work here, which would explain why, at the time of this writing, the city was advertising for labor-relation specialists at $90,000 each. The nine employees of the city’s HR department bring in an average of about $64,000 in salary. There’s a six-figure fire chief and a fire marshal, too, overseeing a fire-prevention program that employs eight people at more than $100,000 a year on average. This is not what austerity looks like. This is what politics run amok looks like. And lest you think that Topeka is some sort of remarkably spendthrift municipal outlier, note this: The city was given a budgeting award by the nationwide Government Finance Officers Association in 2010.
Until the year before last, Topeka also maintained a five-member citywide sensitivity department (“human relations”) that was running through $300,000 a year in salaries and another fifty grand in contracted services. That has been reduced to zero employees at $0.00 per annum. Politicians do not learn quickly, but they do learn. Today it’s the P.C. police in Topeka vs. the fire department. Tomorrow, it’s a choice between the Pacific Fleet and Social Security. In truth, anchoring the Pacific Fleet would cover only a tiny bit of Social Security. Cutting Department of Defense spending to $0.00 would not cover Social Security. And, as spelled out above, we have really good alternatives to Social Security. We do not, at present, have an alternative to the Pacific Fleet. Advantage: squids.
It will be considerably easier to create a market-based alternative to Social Security when there are no more Social Security checks being cut—and they are not going to be cut (cf. that $100 trillion unfunded liability). If we’re lucky and smart, we’ll start doing it before the Social Security checks stop. And it won’t just be Social Security: Medicare and Medicaid are going away, too, whether we like it or not. Most of the welfare state will either wither away entirely or be severely truncated. Americans will have the opportunity to rediscover such hoary-sounding virtues as thrift and independence, and their joint product, liberty. All of which turns out to be worth having in a way that is not nearly so corny and Tea Party–sounding and tricorn-wearing as you might think. That’s the optimistic take, and there is reason to believe that this is the more accurate forecast.
There are, broadly speaking, three ways in which the public finances of the United States of America might be rationalized. One is through the democratic political process. (Stop laughing.) (No, really, stop laughing.) It is not unimaginable that, with the body politic finally fired up about the head-clutching scale of the debt, some sort of necessarily flawed and dirty but credible and achievable grand fiscal bargain will be struck. Most likely, that will come from combining something rather like the Simpson-Bowles deficit commission’s tax plan—which achieves a net tax increase by reducing tax rates while eliminating all or most exclusions, as Jon Huntsman proposed during his Republican primary campaign—and the Ryan Roadmap entitlement-reform plan, which uses a number of market-based measures and old-fashioned spending cuts to reduce the Medicare/Medicaid footprint. Ryan’s plan leaves Social Security untouched for now, and its reform can be put off for a while, but, ultimately, we’re upside-down on the demographics, and the dwindling number of workers whose wages are being sequestered to support a booming number of retirees eventually will revolt.
While the ideal outcome would be to leave investment and retirement savings an entirely private matter, the more likely outcome is that workers will be obliged under law to invest approximately what they paid in Social Security taxes into one of several government-approved retirement funds. This will not be the worst thing that ever has happened to Americans, though it will remain gallingly paternalistic.
If the political class does not step up—and I doubt that it will—then the crisis in American public finances will be resolved through the marketplace. There are two ways for that to happen: slow and steady or fast and panicky. If it goes slow and steady, chances are excellent that we will come through our future monetary-fiscal crisis stronger and freer than we entered it. The latter possibility is more of a run-to-the-hills scenario. Assuming that Washington is either (the populist view) too lazy and stupid or (the scholarly view) too paralyzed by incompatible political incentives to forestall the crisis on its own, then our most reasonable option is to work to ensure that the ultimate resolution in the marketplace is a gradual and orderly one, not an overnight panic.
In all probability, markets will first begin to address the non-sustainability of American public finances through higher interest rates on U.S. sovereign debt. Interest rates did not rise on U.S. bonds and bills during the 2008–11 period, even after the downgrade from Standard & Poor’s. Indeed, such savvy super-investors as Bill Gross of PIMCO, the world’s largest bond fund, played it poorly. PIMCO dumped all of its U.S. debt and then issued a press release announcing the fact, a bit smugly, and promised to short the bond. In the event, demand for Treasuries remained strong, yields went down, and Mr. Gross found himself, in his own words, crying in his beer. Other doom-and-gloomers moderated their positions, but not by that much: Jim Rogers continued to point to the devaluation of the major currencies, a worldwide race to the bottom, and George Soros closed his hedge fund, returning the money to the investors. In each case, these investors expected the projection of endless federal deficits to manifest itself in the near term, either through higher interest rates or a declining dollar, possibly both. But investment forecasting is a very different business from watching the wheels of history turn and trying to discern which way Leviathan is skating. Investment managers have to get the timing just right, and here they didn’t. But it is unlikely that interest rates will be able to stay at or near zero forever. As the United States continues to accumulate sovereign debt faster than its economy grows, interest rates will go up.
Rising interest rates will have some interesting consequences. The single truly non-negotiable item on the federal budget is interest payments on the national debt. Skip one of those and you can pretty much just turn out the lights. Think Argentina circa 2002. If we take Congressional Budget Office estimates of future federal debt at face value, a return to interest rates at historical long-term averages in the next few years would mean a rapid expansion of the cost of those interest payments, making them the No. 1 big-ticket item on the budget, overshadowing things like Social Security, Medicare, and defense spending. Interest payments alone would consume somewhere between one-third and one-half of all federal revenue—assuming federal revenue projections stayed on track. In reality, the recession that would surely ensue from the disruption caused by such an interest-rate spike would bite deeply into tax collections as business profits suffered and economic activity contracted.
Don’t worry—it gets worse. There is no reason to believe that our historical long-term average of 6.5 percent or so is a ceiling on how high interest rates could go. When Ronald Reagan and Paul Volcker got serious about choking inflation to death in the early 1980s, interest rates broke the 20 percent mark. Again assuming more or less stable tax receipts—an unwarranted, optimistic assumption, which I use here only for purposes of illustration—you’d see interest payments of between 60 and 70 percent of federal revenues in that scenario. There is to my knowledge no good estimate of what such interest rates would actually do to the economy and to tax receipts, but it is not implausible that interest payments could in any given year approach 100 percent of federal revenue, or even exceed it. Our choice at that point would be either to default or to add new debt to pay for the interest on current debt, which would nearly guarantee an eventual default.
This risk is exacerbated by the fact that the U.S. government, enchanted by low current interest rates, has decided to rely more heavily upon short-term financing of its debt. The maturity schedule is not at an all-time low, but it is at the lower end of the range, meaning that we have a lot more cowboy-poet debt finances on short-term bills and notes than on thirty-year bonds. That makes the Treasury more vulnerable to sudden swings in debt-service expenses.
Those dire outcomes only hold true for a short and violent upswing in interest rates. In reality, bond investors will continue to compare the creditworthiness of the United States against other sovereign debtors and will probably continue to conclude, correctly, that the United States is a better bet than is Japan or the European Union, to say nothing of Russia, India, China, or any of the other also-rans. But they will continue to notice that the federal debt is growing more quickly than the economy and figure that into their calculations. We already are at the point where everybody can look at the chart and conclude that things are unsustainable. There is little or no question about that, absent some unforeseen economic miracle (such as an unexpected technological breakthrough) that is especially beneficial to the United States and produces a sustained period of growth at historically unusual rates, such as those of the Reagan boom or the dot-com boom.
Hoping for a boom is foolish: For one thing, many booms turn out to be bubbles (late-1990s tech shares, U.S. housing, European green-energy firms, etc.). It is the bubble, not the bust, that causes the malinvestment leading to recessions and economic suffering. The recessions are merely the periods during which the irrational arrangements entered into during the booms get sorted out. Even if a non-bubbly technological breakthrough were to appear on the economic horizon, it is unlikely that it would be something that the United States would be able to exploit to the exclusion or partial exclusion of national competitors. The state of our educational system, our household finances, and our capital markets, combined with the simple fact of globalization, mean that the profits reaped from such a breakthrough are as likely to turbocharge the economy of South Korea, India, or Singapore as that of the United States. The temptation to wait for a miracle and to put off hard choices with wishful thinking is probably the greatest economic threat we face.
It is worth noting that many of our long-term fiscal problems are the result of happy developments, not unhappy ones. Social Security is in trouble in part because of declining birth rates, but mostly because we live much, much longer than we did when the program was created. In 1937, the first Social Security taxes were collected; in the decade leading up to that, more than 37,000 Americans died of malaria in the South alone. Not one of those poor Southerners went on to collect a Social Security check. (Today, nearly everybody who dies of malaria is a poor African—more on that in a second.) Our health-care spending is off the charts—both in government programs in the private sector (what is left of it)—because we do more
for more people, because we aren’t killed off by pneumonia at sixty, and because we have higher expectations for our quality of life from cradle to grave. We are, in one sense, the national equivalent of the individual who never expected to live past sixty-five and didn’t save adequately for his retirement. In the 1930s, it was hard to imagine that our average life expectancy for a white American woman would hit eighty-one years by the early twenty-first century. We’re like Keith Richards: We never thought we’d live this long, and, while we do have the resources to take care of ourselves, we have to rethink some things. We can’t keep appropriating like there’s no tomorrow.
Likewise, the pressure on American middle-class wages from globalization, while painful to bear, is also a sign of the world’s getting better: We Americans and Europeans are no longer the only rich and productive people in the world. Even those poor malaria-ridden Africans are getting in on the act. As the Rational Optimist author Matt Ridley put it in a recent Times of London op-ed:
The world economy as a whole has continued to grow: it shrank by just 0.6 percent in 2009 then rebounded upward by 5 percent in 2010, according to the IMF. The last four years have been rotten ones for us, but good ones for Chinese, Indians, Brazilians, even Africans. Nigeria is growing at 9 percent a year.
Much of Africa, having stagnated in the 1980s and 1990s, has begun growing like an Asian tiger, incrementally raising life expectancy and living standards, inexorably cutting birthrates and poverty. Since Africa holds many of the world’s poorest people, this is great news for anybody who cares about humanity as a whole. There is a long way to go, but the pessimists who said that Africa could never emulate Asia are increasingly being proved wrong.
Humanitarian sentiment compels us to celebrate the economic advancement of Asia and Africa. But it is not the only reason to celebrate their good fortune: We Americans make high-end stuff. It’s hard to sell Boeing and Apple products to poor people.
While the private American economy faces some challenges, it also is presented with great opportunities by the emergence of a global middle class. It is American government initiatives, particularly in the social-welfare branches, that face deep and sometimes existential challenges. What that means is that minus the Big Boom or the Big Bust, we end up with the Big Bummer: a period during which the hard decisions that we have been putting off for a very long time—arguably, since the end of World War II—command our attention at last. The political fights will be acrimonious, but they will probably grow less so as possible options are rapidly foreclosed by economic realities. Our standard of living probably will continue to increase, but not so quickly as we had expected it to, and with a great deal more uncertainty and anxiety. At the risk of sounding cheaply rhetorical, anxiety and uncertainty are among the costs of liberty. Investors in the marketplace can win and they can lose, and none of the free-market solutions that emerge to supplant the welfare state will offer its greatest attraction: the absence of risk. Social Security, public schools, Medicaid—sure, they may stink, but they are guaranteed, and they can be relied upon, or so the story went.
Voters, like investors, do not have a bottomless appetite for risk, and while the entrepreneurially spirited and autistically libertarian may scoff, Americans from the Great Depression forward were collectively making a deliberate tradeoff between risk and return. They chose the lower-risk, lower-return model of the welfare state not because they were irrational, but because they were rational. The welfare state model catered to their preferences for the distribution of risk and reward better than the alternatives. Unfortunately, like the lords of finance and congressional barons who staked everything and more on the proposition that American houses are a magical commodity, the generations of Americans who acceded to the creation of the welfare state were working from a faulty set of economic assumptions. The welfare state does not, in the long run, reduce risk, any more than the securitization of mortgages reduced risk. It concentrates it, putting more and more economic decisions into the hands of political operators who have neither the information nor the incentives to make rational decisions. This, too, is a fact that is becoming increasingly clear in both the financial and political realms.
Unwinding the welfare state will not be easy or painless. Just as the sudden disappearance of several trillion dollars worth of home equity produced a nasty and extended recession, the disappearance of “equity” in future entitlement payments—a figure many times larger than the housing losses—will create a drag on economic growth. Never mind that these are only “paper” losses; most of the housing losses were paper losses, too, since relatively few Americans were forced to sell their homes at a loss. Just as Americans had made plans for what to do with that $100,000 or $200,000 in home equity that they erroneously thought they had, Americans have made plans about how to spend their household finances—how to invest, how much to save, where to live, what kind of work to pursue, when and where to retire—based in part on faulty assumptions about future entitlement receipts. Put simply, there are a lot of Florida retirement condos that are never going to be bought by a lot of Wisconsin middle managers, a lot of cruises and vacations that are going to be skipped, a lot of grandkids’ college funds that are not going to be topped up, and the like. In the aggregate, this will depress economic activity significantly, simply because people are going to be less well-off than they had expected to be—again, and not to belabor the point, this is very much like what happened with the vanishing home equity, but on a larger scale.
It can, however, also happen across a longer period of time. And this is the occasion upon which conservatives ought to remind themselves that they are conservatives, and not right-wing radicals. The changes that will come to entitlement programs and other expensive undertakings at the federal, state, and local level will be fundamental. The changes will be deep and wide. But if we move soon—and if we are lucky—we will enjoy one great luxury: the ability to make these changes slowly, piecemeal, and over a long period of time.
As Newt Gingrich once told an overzealous partisan dismayed at the slow pace of change: “Rome wasn’t burned in a day.” The temptation to look for a silver bullet, one-time, all-in, universal fix will be great and, if we are unlucky, it may even become necessary. But as attractive as that possibility may be, denying ourselves the pleasure of implementing it should be the main political goal of reasonable reformers in both parties and of all ideological stripes for as long as the threat of crisis remains. Crises are unruly things, and only fools and the power-mad hope for them. It is one thing to have a plan to get rich, another to have a plan to get rich quick. One is a strategy, the other a scheme. We should welcome the opportunity for necessary reform, but not welcome it too enthusiastically. The world isn’t ending. Yet.
Kevin D. Williamson is a Deputy Managing Editor at National Review.
more from this author
This article originally appeared in The New Criterion, Volume 30 January 2012, on page 4
Copyright Ã¯Â¿Â½ 2012 The New Criterion | www.newcriterion.com http://www.newcriterion.com/articles.cfm/Future-tense--V--Everybody-gets-rich-7247
Rome wasnt burned in a day.”
I like that line.
Spectacular essay! Thanks for posting it! I’m passing it around!
Newts a side show at this point. In the end no one under 60 will vote for an old fat guy . Sorry .
What choices do they have? An old fat guy? An old thin, fake guy? An almost old traitor?
Hmmmm. Lets's do the math here.
Shiite! It’s true and coming.
The state of dependency can’t continue. Gravity will eventually enforce it’s law.
The author is insane and/or an ignoramus. There is no apt available in the greater nyc area for $500, and if there is, its got rats and no heat. I live here - article came out in the NY Post last week on how much rents are citywide - pretty much nothing under $1,500 for a studio anywhere.
Now, back in the ‘60s & ‘70s, when butter cost a million dollars a pound, you could get an apt in the East Village for $125 a month. You could get a super duper luxury apt in an upscale neighborhood for $1,000.
Same in S.F.& L.A. - apts in Hollywood rented for $150. Now they are in the thousands. I’ll take the expensive butter any day if I can go back to 1970s rent.
“Newts a side show at this point. In the end no one under 60 will vote for an old fat guy . Sorry .”
Wow. I congratulate you! You really got a lot out of the essay.
Hmm. Maybe you posted to wrong thread by mistake. In that case, I recommend you come back here and read the essay top to bottom.
You're missing the forest for that tree. The progressive welfare state is not sustainable.
21.44 Germany OK. Still AAA. Portugal is not. Rating cut by two notches. It's now considered below investment grade, or "junk".
21.39 Italy cut two notches to BBB+. Austria also loses its AAA crown, down one notch to AA+.
21.38 Right, they are coming thick and fast now. Spain has been downgraded two notches to "A", from "AA-".
Finland is OK. Still AAA
21.36 BREAKING NEWS
SURPRISE! S&P downgrades France by one notch to AA+. The outlook is negative, which means the country could face further downgrades.
Outstanding, Doctor. Well posted.