massornament

In recent weeks, an extremely busy semester ended, I cleaned and organized two offices, built a new computer (and rebuilt an old one), had family visiting for about a week, and… well, I have been trying to ignore much of what has been going on in the world.  Things are just too scary.

With Greece, renewed talk of the PIIGS (or is it just PIGS without Italy?), the Louisiana oil spill, mounting strikes in many Western countires, North Korea attacking South Korea (?), things seem a little strange.  But the coup de grâce had to be the official handing over of the last few keys to the world economy to the financial industry… here, I am talking about the trillion dollar bailouts announced in the Euro zone to try to stablize bloated, debt-ridden economies.  Of course, everyone is in a tither because, yet again, politicians (and their constiuents) cannot face the realities of their false economies (and, despite what Stepehen “as an economist…” Harper says, I am including Canada’s debt/deficit reliant economy too).  But few ever realize that when it comes to Western economies, it takes two to tango and the other recipients of these bailouts are the banking and financial industries who have created a global system whereby they can take excessive risks because profits are privatized and losses have been socialized (at least, well into the future).  (By the way, I was reading a economic historian’s book on the weekend and it seems the idea that socialized risk dates back to the early twentieth century.)

The last few days, I have returned to reading about global economics and it tends to scare even me.  James Howeard Kunstler is his old, < sarcasm > optimistic self < / sarcasm >.  But one thing that really hit home was a graph from an article titled “The Financial Crisis is Far From Over” at ChrisMartenson.com:

It is not a new idea… just one that is conveniently glossed over by our “Is-the-recession-over-yet” media.  Sovereign debt, that which is owed to financial institutions, bond-holders, and other governments that buy treasuries, is represented by the red bars.  Unfunded liabilites, which more and more, includes pensions, health care benefits, and the general social safety net that politicians have promised to their constiuents is represented by the grey bar.  So, it isn’t so much that we are broke (and we are) but that everything that people are counting on in the future is quite simply way beyond our abilities to pay for them.  I’m sure that that will be the real issue that all of us have to comprehend.

Those people who think they live in a non-socialized state (like many of the anti-health-care tea-partiers in the U.S.),  are in for a rude awakening when it dawns on them that the health care benefits they (will) receive in their senior years–and much of what we call ‘modern society’–is actually subsidized by the state.  The fact that the U.S. has something like 58 trillion in unfunded liabilities (58 trillion!!) simply means that the future of those services is in doubt.  In fact, this post indicates it is beginning to be a reality:

“Medicare Implodes – Doctors Opt out of Medicare at Alarming Rate,” Mish’s Global Economic Trend Analysis, http://globaleconomicanalysis.blogspot.com/2010/05/medicare-implodes-doctors-opt-out-of.html.

My prediction is this: we are going to have to come to terms with what this means for the future and there will be many hard decisions to make.  When resources dwindle, will we be (can we be?) so accomodating of those with physical or mental disabilities?  Senior care? Health care?  I am surprised at how many friends, family, colleagues and even acquaintances have expressed their desire to not “be kept alive” if their health fails or if they experience serious bodily injury, so I think that many are (un)consciously thinking about the future in this way anyway.  But, many refuse to do so and will continue to in the future.  That, is where things might get really scary, and perhaps James Howard Kunstler is correct in thinking that people will elect maniacs to ensure that the expected standard of living does not fall.

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