Fireworks and Fiscal Ruin

This past Sat­ur­day we enjoyed the sec­ond night of the Fire­works com­pe­ti­tion from yet a new van­tage point, my friend and fel­low blog­ger MJ’s condo in Yale­town. With our view from the 30^th floor, it had to be the high­est ele­va­tion from which we’ve ever seen the show. (Pam and I have been lucky enough to have seen it from 4 dif­fer­ent loca­tions over the last 3 years). This year was marked by plenty of talk and munchies, as well as Tanya (NetChick) and I both try­ing to snap pic­tures of the plumes with our iPhones. Best of all, we man­aged to post them on Face­Book just about as fast as we snapped them. Nerd paradise.

The fire­works this evening of the com­pe­ti­tion the USA’s entry (last Wednes­day had been Canada’s). Nor­mally, the phrase ‘Amer­i­cans shoot­ing rock­ets over Vancouver’s Eng­lish Bay’ is not what any­one here wants to hear, but in this case, I guess it was OK.

Were We Rats Flee­ing a Sink­ing Ship?

While we’ve been observ­ing the third anniver­sary of hav­ing moved here, at the party, appro­pri­ately enough, I got to speak to an Amer­i­can cou­ple who had just made the move here. In fact, they had just arrived a week or so ago, roughly in the same state of con­fu­sion and excite­ment as we had in 2005 (MJ is help­ing them to find a per­ma­nent place to live). The main dif­fer­ences between them and us is that they are mov­ing from San Fran­cisco (vs. our Boston), and our tim­ing was, we all agreed, a lot bet­ter. In the last 3 years, the US Real Estate mar­ket, the US Stock Mar­ket and the US Dol­lar have all fallen markedly in value, leav­ing Pam and me in much bet­ter shape than the cou­ple who unfor­tu­nately didn’t have the nerve to move ear­lier. They even had a place picked out, and just didn’t move on it.

As we com­pared notes, the topic of why we left came up. While it was true that in 2005, we couldn’t stand the direc­tion the coun­try was going (and note that we felt that way before the Tor­ture, Ille­gal Wire­tap­ping and other scan­dals became pub­lic knowl­edge). Despite all that roman­tic stuff about vot­ing with your feet,  the most con­crete dis­as­ter that loomed on the hori­zon for us was the US Pub­lic Debt. Dur­ing the Clin­ton era (our 8-year night­mare of peace and pros­per­ity), the US Gov­ern­ment actu­ally ran a bud­get sur­plus, eras­ing the deficits cre­ated by the Reagan/Bush I years, open­ing up the pos­si­bil­ity of pay­ing down the National Debt. Then along came WPIUSH, and an all-too-brief period of fis­cal respon­si­bil­ity was quickly reversed. So, the real rea­son that we decided to leave the US was that we were con­cerned that the coun­try was going down the drain fiscally.

Yes, it’s easy to see where most of it went (the war in Iraq, for one thing, along with the tax cuts for the top 2% rich­est Amer­i­cans, as well as a mul­ti­tude of fund­ing and over­sight deba­cles, some that have yet to see the light of day). Today, the sit­u­a­tion isn’t get­ting any bet­ter. In fact, it’s get­ting even worse now than it was 14 years ago, when the Fed­eral Deficit (and Debt) first appeared on our radar, accord­ing to Reuters:

WASHINGTON (Reuters) — The Bush admin­is­tra­tion on Mon­day pro­jected the U.S. bud­get deficit will soar to a record of nearly half a tril­lion dol­lars in fis­cal 2009 as a housing-led eco­nomic slow­down cuts into gov­ern­ment revenues.

The eco­nomic and fis­cal dete­ri­o­ra­tion will com­pli­cate efforts to bring the bud­get to bal­ance and pose chal­lenges for who­ever takes over the White House in Jan­u­ary, either Repub­li­can Sen. John McCain or Demo­c­ra­tic Sen. Barack Obama.

“I believe who­ever becomes the next pres­i­dent will have a very, very sober­ing first week in office,” pre­dicted Sen­ate Bud­get Com­mit­tee Chair­man Kent Con­rad, a North Dakota Democrat.

React­ing to the White House’s new pre­dic­tion that the bud­get deficit will hit $482 bil­lion in the fis­cal year that starts Octo­ber 1, Con­rad said that num­ber eas­ily could rise by an addi­tional $80 bil­lion when the full costs of the Iraq war are tal­lied next year.

The econ­omy has been hob­bled by the hous­ing mar­ket col­lapse and soar­ing food and energy prices. In Feb­ru­ary, the Democratic-controlled Con­gress and Pres­i­dent George W. Bush approved a $168 bil­lion, two-year stim­u­lus plan to ward off recession.

With the slow­ing econ­omy and the cost of the eco­nomic stim­u­lus plan, the White House said it thinks the deficit will hit a record $482 bil­lion in fis­cal 2009. How­ever, it cut its fore­cast for the cur­rent fis­cal year to $389 billion.

Even if we ignore where the money went or is even going now, the prob­lem (the Debt) is still out there, like a tick­ing time bomb. Just as there were fore­clo­sures on bad mort­gage loans through­out the US, there will come a day when some­one has to come up with a way of pay­ing that debt. When will that day come? I’m not sure, but I can pretty much count on it being within the next 20 years, and the fur­ther out the US Gov­ern­ment can push it out, the bet­ter for who­ever is in power. Whether the Pres­i­dent in that era is Barack Obama, Chelsea Clin­ton or per­haps one of the Bush Twins, there will come a day when the US Debt reaches some sort of a break­ing point. What effect this will have is also hard to guess, but I can’t imag­ine a sce­nario where it will be a good thing. More than likely, the qual­ity of life in the US will suf­fer, as it has suf­fered dur­ing the past eight years. Peo­ple will work harder with less time for them­selves for less pay, and under poorer work­ing con­di­tions. Decent Med­ical care will be harder to get and also be more expen­sive (again), Aver­age Life Expectancy will get shorter (again), and daily life in gen­eral will get more bru­tal, vio­lent, unfair and unpleas­ant, par­tic­u­larly if you are not very rich. There’s a good pos­si­bil­ity that this event (call it a crash, a cor­rec­tion, a default, or what­ever you like) will come at a time when Pam and I might wish to be retired and liv­ing on a fixed income, per­haps includ­ing some sort of a Gov­ern­ment Pen­sion. You can bet that those will get hit. Rather than end up poor and liv­ing in a coun­try fil­ing for bank­ruptcy (or some­thing worse), we opted for a coun­try that looked to be more sol­vent in the com­ing 20 years, at least.

So, once again, if this lat­est news (which came as lit­tle sur­prise) my instincts about where we went, and when we went have remained on track. I hope my good sense (and per­haps luck) holds. After all, part of ‘good for­tune’ is being in the right place at the right time