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