The documentary Generation Zero is causing quite a stir. Its preview drew gasps and rave reviews at CPAC in February. Hannity at Fox devoted an entire program to it. Bloggers (without seeing it) have already labeled it everything from a plot to get conservatives to the polls to 'disaster capitalism' to outright 'bullsh*t.'
It brings home the point that blaming the multi-trillion dollar financial meltdown on banks, the Fed, capitalism, Wall Street, or political parties ignores the obvious. Governments don't make policy decisions like the Community Reinvestment Act. Agencies like Fannie and Freddie don't inflate the mortgage and housing markets with whimsical financing. Wall Street does not dip its snout ever deeper into ethereal derivatives and high risk strategies.
None of these alleged culprits brought the world to the literal brink of financial collapse. Not really. No institution, no economic model, no political party, no industry sector, no financial system, and no government has ever made a decision or taken an action. Only people do.
Generation Zero follows the radical cultural shift to immediate gratification, self entitlement, and disdain for moral and fiscal traditions starting with the Baby Boomer generation. The trend is global and accelerating with generations X and Y.
Baby Boomers (of which I am one) all over the world have mostly been in charge for the last couple of decades. That includes the leadership of developed nations as well as world class corporate disasters like Enron, Worldcom, and AIG.
Although one can certainly argue that this does not make the global financial mess that generation's fault, it is no matter--there is plenty of blame to go around.
The cradle of western civilization is on the verge of bankruptcy with a national debt nearing 125% of Greece's total Gross Domestic Product (GDP). At its current rate, debt that Greece already can no longer afford will double in less than six years. Nevertheless, private and government employees are striking and rioters are taking to the streets in protest of government cuts to bring their annual budget deficit of 12.7% GDP down to 'only' 8.7%. (Most say Greece will be lucky to achieve a 2% reduction.)
U.S. Deficit Spending Jumps 500% since 2009
For comparison, from 2001-2008 U.S. national debt rose a dismaying 13 points from 56.5% of GDP to 69.2%. But just since 2009 America's total debt has rocketed to 94.3% of GDP with annual deficit spending jumping a whopping 500% to 10% of GDP from the previous eight year average.
Including the six years of war in Iraq and Afghanistan, deficit spending remained at about 2% GDP. Critics rightfully screamed that Bush was a big spender. It was true. But then how in the world does one describe the current administration; a government that has already quadrupled deficit spending and added $2 trillion in federal debt in the first year?
The only other time in history that America's debt got to 100% or more of GDP was in WWII when annual deficit spending peaked at 28% of GDP. Even when the government tried to spend us out of the Great Depression of the thirties, annual deficits stayed below 5% of GDP. I guess we all had different ideas about debt back then.
Redefining Fiscal Responsibility
Saving is out. Sliding ever deeper debt but at a slower rate is heralded as fiscal responsibility. Maybe that is why the interest on our current national debt has reached over $1.2 billion per day and now consumes 11% of our nation's annual budget.
Maybe 11% of the budget seems manageable but it equals $380 billion annual tax dollars to pay nothing but interest on previous overspending. By 2015 America's national debt is projected to grow another 30% approaching $20 trillion. The CBO projects interest will explode to 11% of GDP by 2035. But each year Congress circumvents Pay-as-you-Go legislation by raising the debt ceiling.
It gets worse. About 42% of the federal budget goes to Social Security and subsidized health care. The Trustees of Social Security and Medicare have issued a warning to the public for the third consecutive year.
The Medicare Health Insurance trust fund will be broke in seven years. Medicare revenues from payroll taxes (FICA) will then fall short by 19% and grow to a 50% deficit within another 18 years.
Social Security is currently solvent only if you count Treasury IOUs as money? Forget about 10 or 20 years from now. There is no cash in the Social Security Trust Fund account today. Not one dime. Zip. Nada. Zilch. The big goose egg. Just $1.2 trillion of 'special' Treasury bonds.
Our national debt.is so bad that our government even owes itself money.
Through stones at 'Capitol Hill' or 'Wall Street' if you must. It is not likely to do much good. No lifeless federal building or mechanical ticker tape ever made a decision. It is people that we elect and allow to stay in office. Corporate America is made of people.
No, it is not someone else or some lifeless legal entity that drives our society's culture and values. It is people. We are those people.
We have met the enemy and it is us.
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