There’s been a lot of talk in the Blogosphere on how to “Enjoy the Decline,” spurred on by the popular book with that title by econo-blogger Aaron Clarey on America’s future — or the lack thereof. But what happens next? What happens after the decline?
As Kevin D. Williamson, who writes the “Exchequer” blog at National Review Online and frequently contributes to the dead tree edition of NRO, wrote in the Sunday New York Post, “It’s the end of the world as we know it (and that’s great!)”:
The total fiscal overhang of our federal, state, and local governments — their combined debt and unfunded liabilities — is around $140 trillion, and growing. That is about twice the annual economic output of human civilization, and nearly the value of all the financial assets in the world. It is something close to a mathematical certainty that those debts and obligations will not be made good on at their present value.
The real debate for the next 30 years is not how we go about paying our bills, but how we go about not paying them. What is most likely is a much smaller and more modest government, something closer to what Robert Nozick called the “nightwatchman state.” The reason for that is the fact that we have good substitutes for Social Security and the Department of Education but not for the army or the courts.
This all sounds painful and disruptive, and it surely will be, though exactly how painful and how disruptive will be in part a question of luck and in part a matter of how prudently and intelligently our policymakers proceed while we get from where we are to an economically sane position.
Difficult, yes. But it is also going to be great. There is cause for short-term pessimism, but there also is cause for long-term optimism.
Despite the best efforts of Washington (and Albany, Sacramento, Austin, etc.) the United States is a very, very rich country. Fantastically rich. Absurdly rich. We have a great deal of wealth, extraordinarily productive and creative people and stable institutions.
Our key economic failings are in education, health care and retirements — three sectors dominated by political rather than economic action: the K-12 monopoly model of education, Social Security and other retirement entitlements and a hodge-podge of medical programs which meant that even before the enactment of ObamaCare about half of all health-care spending was government spending, a fact that Republicans foolishly ignored when they protested that we had “the best health-care system in the world.” (Note to Republicans: We have great medicine and medical technology; we have a terrible system of paying for health care, and it was terrible before ObamaCare, too.)
Kevin’s new book, The End Is Near and It’s Going to Be Awesome, explores this topic in detail. Kevin and I recently discussed the end of the world in a wide-ranging 20-minute podcast, including such topics as:
● How cataclysmic will the earth-shattering fiscal kaboom be?
● How government red tape fuels both the higher education bubble and retirement shortfalls.
● Kevin updates Leonard Read and Milton Friedman’s classic “I, Pencil” lecture for the Internet era, with an assist from Gordon Gekko’s cell phone.
● Why do those who design, and many of those who purchase the Apple iPhone want highly customizable 21st century technology in their day-to-day lives, and yet want socialized healthcare and retirement schemes that are straight out of the 1930s smokestack era?
● Speaking of Mr. Gekko, how did the GOP lose him to the left in 2008? And what to make of Occupy Wall Street being simultaneously for and against their fellow Democrat, Barack Obama, aka, President Goldman Sachs?
● Why was Mitt Romney so ineffective in communicating Economics 101 to the American voters?
And much more. Click here to listen:
If the above Flash audio player is not be compatible with your browser, click on the YouTube player below, or click here to be taken directly to YouTube, for an audio-only YouTube clip. Between one of those versions, you should find a format that plays on your system.
Transcript of our interview begins on the following page; for our many previous podcasts, start here and keep scrolling.