BBC News - Is the US in denial over its $14tn debt?

[futurebeachbum]

Article today on the BBC News site called "Is the US in denial over its $14tn debt?" by Justin Webb. A BBC reporter who lived in the US for a long time.

The thrust of the article is that we are ignoring a big ugly reality that is only going to get worse.

Some interesting observations:

This is a story of debt, delusion and - potentially - disaster. For America and, if you happen to think that American influence is broadly a good thing, for the world.

The debt and the delusion are both all-American: $14 trillion (£8.75tn) of debt has been amassed and there is no cogent plan to reduce it.

He mentions that we are really at the mercy of China. Not their military, but their bankers.

His general thrust is that Americans are having a hard time facing reality.

What is the root cause of America's failure to get to grips with its debt? It can be argued that the problem is not really economic or even political; it is a cultural inability to face up to hard choices, even to acknowledge that the choices are there.

He uses Alaska as an example:

The nation is staggeringly successful and gloriously attractive. But it is also deeply dysfunctional in some respects.

Take Alaska. The author and serious student of America, Anne Applebaum makes the point that, as she puts it, "Alaska is a myth!"

People who live in Alaska - and people who aspire to live in Alaska - imagine it is the last frontier, she says, "the place where rugged individuals go out and dig for oil and shoot caribou, and make money the way people did 100 years ago".

But in reality, Alaska is the most heavily subsidised state in the union. There is more social spending in Alaska than anywhere else.

To make it a place where decent lives can be lived, there is a huge transfer of money to Alaska from the US federal government which means of course from taxpayers in New York and Los Angeles and other places where less rugged folk live. Alaska is an organised hypocrisy.

He basically says that many Americans prefer to live the fantasy of rugged individualism rather than face the reality of what is going on.

He discusses the Tea Party's and other's predeliction to cut spending, but only where it doesn't affect them.

He also brings up taxes and why no one talks about raising them.

America's two main political parties are so desperate to raise money for the nation's constant elections - remember the House of Representatives is elected every two years - that they can do nothing that upsets wealthy people and wealthy companies.

So they cannot touch taxes.

No startling insight there on taxes, but it is interesting to get the viewpoint of someone from another country who has been here and observed the situation with some detachment.

 

[idlewind]

Sad insights but true.

 

[scooterbug44]

Great "the emperor has no clothes" article.

And sadly, many will dismiss anything they don't agree with as "propaganda."

 

[Lake View Too]

I can't get over the phrase: "organised hypocrisy". This defines Congress to perfection.

 

[Zebraspots]

Of course we're in denial. We're in denial about our own finances and debt, so why would we be realistic about the government's.

 

[Andy A]

Of course we're in denial. We're in denial about our own finances and debt, so why would we be realistic about the government's.

Speak for yourself Zebraspots. I, and many others of like mind, am well aware of what I make, how much I can spend and what I need to live each month as well as how much I can save. Yes, save. It is something many Americans do not seem to understand. I don't care how much you make, you can save something out of each paycheck even if its just a dollar. It does add up. Back to the point at hand. Most of us who are fiscally responsible want our government to act in the same manner. It is not unrealistic, only difficult to do unless you make yourself do so.

 

[Zebraspots]

I was speaking for the majority of Americans. My financial house is in order, making me a minority in yet another category.

 

[futurebeachbum]

Public Workers Strike in Britain Over Pensions

Looks like much of Europe is in denial over their finances as well.

From today's NYT article "Public Workers Strike in Britain Over Pensions"

Joining a growing wave of unrest in Europe over government austerity measures, tens of thousands of British teachers and public-sector workers walked off their jobs on Thursday to protest proposed changes to their pension plans.
...
Much of the workers’ anger, said Mark Serwotka, general secretary of the Public and Commercial Services Union, has to do with a feeling of helplessness and resentment at having to suffer from the mistakes of bankers and others who caused the economic crisis. The government, Mr. Serwotka said in a statement, is “forcing some of the most vulnerable people in our society to pay for a crisis that was not of their making.

So in Europe, just as here, the 'its not my fault and I must not share in the suffering' factor is a common thread along with ignoring the reality of the situation and not caring about the future we are creating for our grandchildren.

 

[scooterbug44]

It's all of our faults - anyone who has ever voted, learned how to do basic math, studied history, or accepted anything from the government.

I believe that covers 100% of Americans in some way, shape, or form.