August 10, 2009

America Calms Down Just in Time for Fall TV

I guess the recession is over indeed. Everyone is saying so. In truth, I was wearying of the Armageddon/End of Days talk on Zero Hedge, Mike Whitney, Clusterf**k Nation, Peter Schiff and the rest. It's boring to admit, but as Paul Krugman writes today, the administration actually managed to maneuver the U.S. through the shoals and submerged reefs of financial calamity and avoided Great Depression II. James Kunstler, at Clusterf**k, has been reduced to bringing out W.B. Yeats and his "rough beast slouching," this time in the form of U.S. Treasury insolvency. When a Peak Oil guy has to resort to the same line of attack as Pete Petersen and his hysterical crew, you know he's running on empty. I'm just not impressed.

Yes, it's true the United States is in hock up to its eyeballs, but oddly enough this is also true of most modern democracies. That might surprise you, but the CIA (always our first line of defense) maintains figures on the public debt of other countries, and the U.S.A. is pretty far down the list when you measure our public debt versus our GDP. Japan is much worse, Germany and France are not as well off as we - and Zimbabwe? In a class by itself, fortunately. Now it's true that in absolute numbers the United States owes more than anyone (the "biggest debtor nation"), but after all - our GDP accounts for about $14 trillion of the world total of $55 trillion. We're bound to be bigger in every category than everyone else, including, of course, the sheer mass of our people - we're the fattest people on Earth, too. Well, obesity (historically) has been associated with prosperity, instead of diabetes and heart disease; we've just decided to give it a bad rap.

As usual in such discussions, it's important to define terms and know what the Central Intelligence Agency (and it's cool the spooks actually publish such useful stuff on the 'Net) means by "public debt." It's not money a country owes itself. The U.S. owes a tone of money in the form of "intra-governmental" obligations, such as the Social Security Trust Fund. Once upon a time, the idea was that S.S. would sustain itself by current FICA payments until 2017 or so, but the Recession (and it has been that) has probably moved that date up to 2013 - which, of course, is really not so far away. Resort will then have to be made to the "Trust Fund," which currently has zero dollars in it, and will have zero dollars in 2013 as well. That is because Congress spent the Trust Fund surplus over the last 26 years or so. People with lively senses of humor talk about Congress's sacred commitment to "honor" the Trust Fund and "redeem" the "bonds", and I just wish they wouldn't do that when it makes coffee splurt out of my nose.

But I'm just not in the mood to crack on the White House, and not only because I don't want to be reported to, Obama's snitch line for those spreading "disinformation." A threshold question always arises - who determines what "disinformation" is? The Bureau of Labor Statistics - should they be reported? You see how easy it is to fall into negativity and wind up being denounced. Do I have to remind you that Guantanamo is still open for business?

So in years like 2013, we'll have some adjustment problems, I think, but look at it this way: just because 2013 arrives doesn't mean that suddenly Social Security will have no money. There will just be a shortfall. At first Congress will borrow the money "from abroad," or the Federal Reserve will lend it to itself, or whatever. The details are not as important as realizing that the U.S.A. is a country of immense resources, and we'll figure something out. Such as telling people who don't need Social Security they can't have it anymore. That's known as "means testing," and it will become a happening thing.

The other thing Kunstler was complaining about again today was ugly suburbia. He's got this thing about the hideous appearance of Subdivision America. Well, okay - it's not so great, I'll grant you that. It so happens I grew up in a kind of West Coast Levittown (orig. NY version pictured above) - actually, a lot more than "kind of." Such places drive the Clusterf**k Man up a wall - sanitized, amenity-free, uniform, boring, etc. Well, look - you're only going to grow up once. Should you really spend your adult life hating your hometown? And here's another question - did you see "Slumdog Millionaire"? Neither did I, because I can't stand Indian cinema, but nevertheless - I'll bet you the conditions in Bombay or Mumbai or whatever where all these slumdogs live are just atrocious, and I can personally attest that the slums around Mexican cities like Guadalajara are unbelievably primitive and depressing - so was it so terrible to grow up in a housing tract where the sewage system worked, we had running water, reliable electricity and plenty to eat? Only if you're like Kunstler and want to complain for a living, and that's only because his novels don't sell.

So "Curb Your Enthusiasm" starts next month and damn if I'm going to spend my time worrying about an economy that's well on the road to recovery, thanks to the steady hand of our surprisingly boring new President. It's okay to be boring, Barack. Ike was boring, too, you know. You will preside over a country where the standard of living has locked in at a level considerably, noticeably, definitely lower than we thought it was about three years ago, based on the consumption levels made possible through 133% household debt-to-asset ratios. The 33% is gone, that's for sure, so settle in, choose your premium channels carefully, and thank your lucky stars you don't live in Bombay. Or Mumbai, or wherever.

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