What to Worry About

If we at SAFE have said it once, we have said it a thousand times. The finances of the federal government are out of control and the results – barring corrective action soon – will be disastrous.

This is not simply our opinion. Many financial experts feel the same way. For example, Professor Laurence Kotlikoff writes that the United States is “heading into one God-awful fiscal storm, the full dimensions of which are hard to fathom. To make matters worse, our captain has lost his bearings; he’s got us pointed right at the storm and is gunning the motor. We’ve got one chance left to turn the ship around, batten down the hatches, and escape the worse, but we need to act decisively, and we need to act now.”

“The Coming Generational Storm,” Kotlikoff and Burns, MIT Press (2004), pp. xii-xiii.

So far, the general public does not seem to be paying attention. One reason may be that SAFE is not the only advocacy group with a “doomsday scenario.” For example, environmentalists are offering disturbing theories about the consequences if global warming is allowed to continue – rising sea levels, horrific weather, and the end of life on earth as we have known it. See, e.g., Al Gore’s movie, “An Inconvenient Truth.”

If people are going to pick a problem on the horizon to address, should it be the coming fiscal meltdown or global warming? Here’s a table that compares several key aspects of the two issues.

	Fiscal Meltdown	Global Warming
Likelihood that there will be a crisis if corrective action is not taken.	100%, as the projected deficits are far too big to offset with tax increases or borrowing. Precedents – fall of the Roman Empire, French Revolution, double digit or higher inflation in many countries in the past 100 years.	Uncertain, as the earth’s climate has fluctuated considerably over the course of human history without dire consequences.
Time remaining before crisis.	Perhaps 10 years.	50 to 100 years.
Understanding of what must be done to avert a crisis.	High – the solution, basically, is to acknowledge that there is a problem and drastically cut Government spending.	Low – proposed actions might slow the rate of global warming, assuming cooperation of all the countries involved, but would not reverse it.