A news report in the Daily Telegraph (not always a reliable paper - look how one of their correspondents made a FUBAR in relation to describing the ROC as a the Greek part of Cyprus which Greece should sell to Turkey) has highlighted how the Greek Mess could pale into insignificance unless the good old US of A gets its a*se into gear.
Daily Telegraph wrote:America's federal government debt is growing at $40,000 per second. It has reached $14 trillion, whatever that means. More comprehensible perhaps is this fact: the debt will soon match the entire GDP of the United States. Outside wartime, that has never happened before.
America is at war - in Afganistan, Iraq and Libya
A combination of tax cuts and spending increases, coupled with the war on terror and the financial meltdown, has seen America's fiscal health evaporate.
Even the savings implied last week in the surge home of US troops from Afghanistan, count for little more than a drop - a splash, perhaps - in this ocean of debt.
The real issue is the future of America's domestic spending.
The projections are appalling: the non-partisan Congressional Budget Office thinks that by 2030 interest payments plus spending on pensions and health will take up all the government's tax income. Everything else, from education to war-fighting, will have to be borrowed for. Or cut out.
The thought should send shivers down all our spines.
A nation whose productive capacity, whose support of economic and political freedom plays such a big part in our world could be heading for a period of poverty and introspection.
And the poverty could come quite suddenly – brought on by interest rate rises forced on America by world markets, or by foreign powers selling dollar bonds.
So what is to be done?
Here is where it gets really tricky. The problem is not primarily economic. Nor is it entirely political. It is wider, deeper: it is a failing at the most basic level of culture.
Americans, it seems to me, have allowed themselves to become fundamentally deluded about the kind of people they are.
Look at Alaska.
The Pulitzer prize-winning author Anne Applebaum tells me in the documentary that Alaska is a myth. People who live there (encouraged by a famous former governor) imagine that it is the last frontier where rugged all-American individualists grapple with snow and bears and protected only by their guns, come out on top.
In fact Alaska is the most heavily subsidised state in the Union. Social spending and tax breaks are huge – Alaska sucks hard on the teat of the state.
For Alaska, read America.
Americans have a weird inability to see themselves for what they are: deeply involved with the federal government and deeply dependent on it. The myth obfuscates and befuddles. It allows Americans – including the Tea Party movement – to have wonderfully vivid rows about public spending and tax but never really to confront the reality that taxes (my taxes!) are going to have to rise and spending on health and pensions (my health, my pension!) is going to have to be cut.
The Republicans have had a go at it recently – encouraged by the Tea Party folks – but came a horrible cropper in a by-election for a previously safe New York State congressional seat where their voters simply melted away after hearing that their entitlements might be cut.
Americans like to blame their politicians for the mess but the fault, frankly, is with the people. They will not give up their national delusion. How does it end?
Richard Haass invokes Churchill: Americans will do the right thing but only after all other options are explored. Who am I to argue with Haass and Churchill combined? But it is fair to say that they are leaving it rather late.
http://www.telegraph.co.uk/news/worldne ... facts.html
