It’s been a while.
Watching so much happen in our country, so quickly and so badly makes writing about our current situation really challenging. Our various problems all relate to one another in nuanced (and sometimes not so nuanced) ways and everything changes so rapidly that pinning down a single topic becomes almost impossible.
With that in mind, I think starting broadly makes the most sense. I believe we are living through a period in America that future historians will study carefully. Our success as a society literally afforded us the leeway to forget how we became successful. For decades, we implemented policies which make no sense if you stop and think about them, but we didn’t.
Where Does that Leave Us?
That should have been tragic for us, but we faced a serious good news/bad news situation. The good news was we – as a society – had 200 years’ worth of saved wealth. By that, I mean our society (with brief exceptions) produced more than it consumed for two centuries. That left us with savings, infrastructure, production capacity, all sorts of manifestations of wealth creation that consistently exceeded our wealth expenditures.
The bad news was that saved wealth – the vast majority earned by those who came before us – buffered us from experiencing the ramifications of decades of foolhardy choices. We made expensive choices as a society with little to no return on our investment. We covered that loss (because that’s what it is) by tapping our collective “savings.” Most frequently, we did that by taking on debt, printing more money, or increasing more visible taxes on people who we were told could “afford” them.
The human mind isn’t really built to look for cause and effect relationships in time periods spanning much more than a year at most. As a result, it was hard to see the damage accumulating. One of the most striking things about the past couple of years is just how quickly bad policies yielded obviously bad results. I believe this new “speed to market” of negative ramifications from bad policies exists today because we burned through our cushioning buffer.
No More Margin for Error
Today, our debt is too high, we printed far too much new money, we kept interest rates artificially low for far too long. To get elected, then reelected, our politicians tell voters they should be able to enjoy a good life and standard of living without needing to endure the soul-sucking drudgery of work. Government grew to a size no amount of taxes on the whole population could support. We lived on the spoils of a system and set of beliefs we simultaneously rejected.
The new, rapid reckoning we see between bad policy and bad results demonstrates we spent our communal rainy-day fund. Now, we must pay directly for our bad choices.
So how does this end?
Human beings learn surprisingly quickly when we get reliable, rapid feedback. We get that daily right now. My hope is we will see which of our choices made sense and work and which of our choices created bad incentives and yielded damaging results. If we can be honest with ourselves about which was which and alter our behaviors and policies, I think we can still right the ship. If we can’t, we will see that reality isn’t impressed by our attempts to ignore it.