Dave Pollard's environmental philosophy, creative works, business papers and essays.

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	May 30, 2003

FRIDAY FIVE ON POSTERITY Heavy duty Friday Five this week, deep questions on what each of us wants to be able to look back on at the end of our lives with pride. I can't resist that kind of quiz, of course: 1. What do you most want to be remembered for? My creative writing My political activism re: limiting human population growth & resource consumption, ecological taxation, biodiversity and habitat preservation Establishing a foundation that incubates and supports post-capitalist collaborative 'businesses', and by so doing gently undermine the capitalist system and our acquisitive culture before it destroys us (modest, eh?) Funding programs that explore animal communication, consciousness, emotion and culture, so mankind can learn from them 2. What quotation best fits your outlook on life? to be nobody but yourself in a world which is doing its best, night and day, to make you everybody else means to fight the hardest battle which any human being can fight, and never stop fighting (e e cummings) 3. What single achievement are you most proud of in the past year? This blog, and especially The Box (short story), The Third Way (environmental philosophy), The Weblog as Filing Cabinet and this week's Social Network Enablement posts (business writing) . 4. What about the past ten years? All the stuff that led up to this blog: My collections of creative writing, philosophical writing, and business writing. And finally following, myself, the advice I've always given others (see question 5 below). 5. If you were asked to give a child a single piece of advice to guide him or her through life, what would you say? Like yourself, give yourself credit, believe in yourself, do what you really want to do, don't give up, and don't let anybody get you down. 4:02:45 PM  trackback []  comment []

PLAYING DICE WITH THE WORLD ECONOMY A couple of months ago, I reported on a scheme from economist Richard Douthwaite on how to end US military aggression by forcing down the inflated value of the US dollar. Since then, the dollar has been in precipitous decline, and even the Bush regime is admitting that its deficit spending will impose a crushing burden on future generations. But that assumes the global economic system will allow the US to continue in its economy folly that long. Here's Douthwaite on how the US economy sits on a house of cards, written before the dollar's decline and Congress' approval of the insane Bush tax cuts for the rich: The US economy has been subsidized for many years by the rest of the world. The subsidy has come about because the rest of the world has allowed the US to import very much more than it has exported since 1982. In that period, countries receiving dollars for the goods and services they have supplied have only spent a small proportion of them on imports from the US. Most of the remainder has been loaned back to America, typically by being used for the purchase of US Treasury bills or shares in companies quoted on the US stock exchange. $2,500 bn, roughly half the rest of the world's total savings, has been invested and lent in this way. Amazingly, this huge inflow of funds has cost America nothing - so far. True, interest has been paid on the loans and dividends on the shares but both payments have been in dollars that have simply been added to the outstanding debt. The US has not had to supply anything that cost it real resources to make for the use of this massive amount of capital. Moreover, the bigger its trade deficit has been, the more dollars foreigners have had to invest and the higher they have pushed Treasury Bond prices and the Dow Jones share price index, making investment in America seem very attractive. Even more foreigners have consequently been keen to get hold of dollars to put their savings there. At the moment, the US trade deficit is running at much higher levels and America is having to borrow around $1.25bn every single day. Now take a look at this report, from CNN yesterday: The Treasury Department Thursday denied a report that the White House suppressed a paper estimating the United States is facing at least a $44.2 trillion [debt] due to future health care and pension obligations [because the news would have jeopardized the Iraq war effort and the Bush tax cut]. London's [conservative] Financial Times said in its Thursday edition that the Bush administration "shelved" the report "commissioned by then-Treasury Secretary Paul O'Neill" and written by former Treasury official Kent Smetters and former Treasury consultant Jagdessh Gokhale. According to the Financial Times, the report shows the U.S. government is threatened with being overwhelmed by the future health care and retirement costs of the "baby boomer" generation. The study concludes, according to the report, that sharp and permanent tax increases or massive spending cuts -- or a combination of both -- are unavoidable if the United States is to meet the health care and retirement benefits promised to future generations. The Treasury Department does not deny the numbers, they just deny that they suppressed the report. I'm not an economist, but when you put the facts of these two articles together, the undeniable conclusion is that Bush is playing a terrifying game of brinksmanship dice with the global economy. A debt of $44 trillion, with additional borrowings and deficits of $500 billion per year. Who is this monstrous debt owed to? American citizens, who invest in government securities, directly and to a greater extent indirectly through the insurance companies and corporations they invest in, who in turn invest in government securities. And foreign governments and foreign investors who hedge the massive US trade deficit, denominated in US dollars, by buying equally massive amounts of US dollar-denominated shares and treasury bills. We've seen what happens to governments like Argentina's, that borrow too much or spend too recklessly. The IMF turns off the tap or raises the interest rates on borrowings to reflect the unacceptable risk, the foreign lenders call in their loans, and the economy collapses. The consequences of that are massive currency devaluation, stock market collapse, massive layoffs, and severe austerity (huge tax increases and huge cuts to government services and payrolls). But what if the recklessly overspending country isn't a Latin American third-world country, but the world's only political and economic superpower? We don't know -- it's never happened. Bush the gambler is counting on the fact that the IMF and the lending countries (including, ironically, many Arab oil states) won't dare force the US into bankruptcy, because then the whole global house of cards collapses. To use a simple analogy, Bush is the high roller in the casino who is losing big-time, and keeps borrowing more and more on credit, and tossing most of the chips he's borrowed to his rich friends, to the point where the casino knows full well that he can't pay it back. He's just got to keep playing until his luck turns around. The problem with the analogy is that when it comes time to cash in and pay the banker, Bush will be long gone. It's the citizens of America and the world, and our children, who will have to pay for his monumental folly. Canadian Prime Minister Chrétien this week became the first leader to publicly worry that US spending is out of control, and predictably the neocons, led by the soon-to-flow-the-coop Ari Fleischer, railed against him, predictably blaming it all on terrorism. Chrétien is scheduled to present the global economic report at the upcoming G8 summit meeting in France. Today, Bush announced he'll leave the summit early. Guess he has to get back to the craps table. 7:56:35 AM  trackback []  comment []

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