81

All that has to happen is for the GOP to show how truly Marxist/Socialist the Democrats are. On top of this is the Molech-like Humanism that also literally defines what Obama and his leftist hordes are peddling. It is not as dark for the Republicans as you think "IF" they just use the truth to expose how bad for America the Democrat option for the White House would actually be. Just showcase the ENDA Bill and what it will do to religious people countrywide. Why would we want to sell-out our children's future for debt AND the immorality that pervades every single action of the Democrat agenda? Looking to just the word "parent" shows the Democrats for the wrong choice that they are for the "future" of this country. Take California and Massachusetts as examples, "parents" in the normal common moral meaning, is hate speech to Democrats. If the GOP wants to win the White House, then make the choices as truthfully and honestly as can be. A baby is NOT a punishment no matter the cause. Americans have not quite sodomized every aspect of society and once clear examples are given "for the future" the Democrats will be sent packing.

I think this partly reflects the speed of information these days. Everyone sees the Dow every morning, maybe several times a day, and it seems like consumer confidence and job numbers are reported at least daily. (How many of these are actual news and how many are just repetition, I wonder.) In 1992, people were convinced they were in a recession that it turns out never happened. Now, we're experiencing one that hasn't even gotten here yet. Perception has never been more powerful than now, when we're bombarded with so much information. People are reacting daily, even hourly, to what they're being told.

Which isn't to say that the economy is good. But it's not much different than in the 90s, when credit started to exceed savings and personal bankruptcies jumped. The main difference is what's being reported and how. If we hadn't sunk ourselves into financial trouble with decades of easy credit, high tax and spend policies, and trade deficits; we might be talking ourselves into the doldrums anyway--all because Democrats learned in 1992 that yelling "recession" a lot can get them elected.

Am I the only one that finds this statistic strange? If 81% of the nation thinks it is going in the wrong direction, what do they consider the right direction(ie. What is their complaint?)?

Say 40.5% of the nation feels that Iraq has gone bad, the president is a moron, Republicans and the Bible belt are blocking the country from becoming a perfect secular socialist utopia and the country is the worse for it.

Now say that another 40.5% feel that secular progressives are undermining our spiritual roots and thus our social underpinnings, our borders still aren't secure, the Congress and potentially the White House are controlled by big libs for whom they have no respect, the courts continue to legislate instead of interpret as they shred to constitution and we cannot continue down this path.

Obviously we have a full 81% but it is nowhere near a consensus (as this percentage would seem to indicate). How can it be relevant to the discussion to know how much of the "wings" disagree when they cannot agree about what they disagree? This is an instance where if you pull back too far in order to see the big picture, you are no longer able to tell what is the picture at which you are looking.

Any financial and, perhaps more importantly, legal and foreign affairs experts want to weigh in on the consequences of a country just deciding to not pay back money loaned to them by another country?

When the loaner is someone like, say.. China?

And interestingly, the other party the debt is owed to is.. the US citizens, in the forms of various bonds, etc.

So, when they decide to default, they are 'not paying' the voting public.

Defaulting on the debt doesn't come without consequences. And its either that debt, or those consequences, that we are leaving to our children, and our grandchildren. (And for those who don't plan on dying in the next couple of years, yes, ourselves.)

"For all Obama's vulnerabilities, it's still hard to imagine how the country is going to put a Republican in the White House again in this kind of atmosphere."

Bingo. Better get used to saying "President Obama."

Any financial and, perhaps more importantly, legal and foreign affairs experts want to weigh in on the consequences of a country just deciding to not pay back money loaned to them by another country?

1. The unfunded liabilities posed by Social Security & Medicare are artifacts of the current law & regulations governing these programs. "Default" in this case consists of decreasing current/future payouts. By way of illustration-via-exaggeration: if we abolished these programs tomorrow, those liabilities would vanish overnight. Less extreme "defaults" might include means-testing or raising the eligibility age.

2. Default on foreign debts could take many forms. One is a dollar crash (either sudden or gradual), where we keep making payments, but in depreciated currency. Another would be to simply stop making payments of principal & interest to foreign creditors. We could also seize foreign-owned assets - including stocks & bonds - or freeze them indefinitely (basically the same thing).

3. Foreign policy implications of default: if we're determined to play hardball, I don't see how foreign creditors could do much. We have nukes, and the world's most powerful navy, so national-level foreclosure isn't an option. Economic retaliation is: e.g., foreign seizures of US-owned assets, boycotts of goods & services (e.g., Chinese manufactures, Arab oil). I suspect we could survive these actions, but at great cost (e.g., prolonged depression, while our economy adjusted). We'd be in a much better position to default given energy independence and more domestic manufacturing.

4. Economic implications: [My SWAG; corrections welcome.] Foreigners would be far less willing to invest in any US-based assets for some time to come. This means higher interest rates (owing to decreased supply of capital) & hence less lending. This means lower economic growth since there's less credit to finance capital investment and consumption spending. The cost of servicing the national debt would also increase, and credit rationing might make deficits less sustsainable. OTOH, higher interest rates would decrease incentives for buying on credit, and increase the incentive for saving - i.e., frugality.

Question: why do we consider it a problem that our children won't enjoy a standard of living better than ours? The question depends on an assumption of the possiblity (and the desirability) of constant progress. That we measure success in terms of material wealth is merely another indicator that we are pursuing the wrong things. Perhaps we should teach our children to be content and to pursue things that cannot be reduced to the terms of the market. Perhaps a simpler life (a crunchy life?) is a happier one.

Karen: "Defaulting on the debt doesn't come without consequences."

I was simply making a point about the crucial difference between money and credit. I suppose this only excites myself and other economists.

I agree with what MI said and only have this to add: I believe it is a near-certainty that our children are going to default on at least some of the debt we've left them. It simply to great to be serviced if you add the rest of the liabilities we've heaped upon them such as Medicare, Social Security and government pensions on the Federal, state and municipal levels. (This last one is HUGE -- some $50 Trillion over the next few decades -- and has hardly received any attention.) As some point, the economic, social and political consequences of NOT defaulting will be greater than those of defaulting.

Of course we could also default and threaten nuclear war if any US assets were seized. Personally, I like the idea of levying tribute, telling the rest of the world to pay up if they don't want to be nuked out of existence.

This would work for non-nuclear powers (e.g., the Gulf states), and powers with small arsenals and no intercontinental delivery systems (e.g., India, Pakistan, Israel, North Korea). Denuclearizing China, Britain, or France would be far more risky, since each has at least one SSBN, and China has ICBMs. Russia has so many nukes that involuntary denuclearization might be impossible even with a near-perfect SDI system.

If we're going to do nuclear blackmail, we'd be well advised to have a good missile defense shield in place beforehand. As well as _very_ good border security (to guard against smuggled nukes). A monopoly on uranium enrichment, reprocessing technology, & breeder reactors would also be helpful, along with a much better foreign intelligence service (to catch rogues trying to break said monopoly).

There are downsides to tribute. Anything that renders government less dependent on the citizenry for revenue tends to render the former less accountable to the latter. Tribute also makes war and the threat of war a profitable enterprise for voters; every cent collected in tribute can potentially be used to fund tax cuts (for Republicans) and welfare benefits (for Democrats). What happens to economic productivity when citizens realize they can maintain/raise their standard of living simply by voting themselves more foreign plunder instead of doing something productive with their lives?

And what happens when a country decides to reject our demands? One wonders if honorable warriors would be willing to exterminate innocents, not for the sake of defending their beloved homeland, but in order to subsidize people too lazy to work themselves. Or if those warriors might not begin to wonder about the justness of such an arrangement.

You can include me in the 81% -- but that doesn't mean that I'm ready to say, "President Barack Obama."

Some of this is driven by anxiety about the duration of the war, the Bear Stearns collapse, rising oil prices, etc., etc. Much of that anxiety will be expressed this fall in votes for Democrats.

However, some of this also comes from conservatives who are annoyed by out-of-control Federal spending and fatigue with Bush. Many of us gave "W" a "second chance" in 2004 and aren't entirely thrilled by the results. BUT ... the prospect of a left-wing Obama Presidency persuades us that the country is really heading towards the cliff's edge. That, too, may be contributing toward the 81%.

Some of the previous posts provide helpful explanation. Especially the observation that our "wired" culture means immediate, global dissemination of bad news anywhere. This trend began with the laying of the first trans-oceanic cable in the 1840s, but it has intensified in the past 15 years. Back in 1990, when the NYT first started doing these surveys, there was no internet and only ONE 24-7 cable news network (CNN). Now you can't get away from bad news -- unless you unplug everthing and go off mountain hiking somewhere.

Reading blogs daily about the how the culture and society in general are going to he** in a handbasket can lead to a belief that our country is headed in the wrong direction. Oh, but it is so addictive to buy into that doom and gloom that I just can't stop reading.

I do NOT expect my kids to live better than I am, either in terms of finances/material goods OR in terms of non-material quality of life. Only if we have a major realignment of national priorities can we at least expect the latter. If we keep striving for the former, I think a small percentage of kids will be better off financially, but we will have increasing wealth disparities leaving most worse off financially and virtually everyone worse off for non-material quality of life.

Stepping back from hysteria over relatively minor declines in the stock market and housing prices, looking at the big and long-term picture, it is already apparent that my generation is worse off in both finances and quality of life than our parents. The Baby Boomers could work middling jobs, often even without a college education, have one parent stay home for many years, raise children in a single-family home, retire in their early 60s and then play golf for 20 years. By now (younger Gen X / older Gen Y) young adults are saddled with enormous college debt as a prerequisite to jobs that barely pay enough to support a single person, and only a small professional elite can afford to have one parent stay home with children. Yes, we have more electronics like iPods and we spend more on eating out and vacationing than our parents (seeking relief from chronic overwork), but even if all that is eliminated, many young families couldn't come close to achieving the basics of having adequate housing with a parent at home because housing is so much more expensive than anything else. A 10% housing slump doesn't even begin to make it affordable either, when housing prices still are more than twice what they were in 2000 but wages have been stagnant.

My children will have it even worse because of the staggering government debt that will require them to be taxed even more punatively. They will also have it worse because the incessant pursuit of higher productivity and higher consumption is unsustainable, but policymakers seem to be clueless about this fact. They pursue policies to encourage more and more consumption and push people to spend more and more time working outside the home, resulting in more economic disparity and less emotional and spiritual satisfaction.

What I hope for my children is that policymakers would stop this mad dash into the sea and promote policies that are economically frugal and give most people the opportunity to have a humane family, social and spiritual life. But I can't say I see any reason for optimism.

Who's this "KStreet Catholic"? Couldn't he/she come up with a somewhat different nom de guerre than yours truly? I was here first, nyah, hyah, nyah.

Elizabeth, I should have said that the Boomers will be able to play golf for 20 years - I realize they're just now beginning to enter their early 60s. Most of the people I see who are in their 50s and 60s have enjoyed the lifestyle I described, or could have enjoyed it but sometimes CHOSE to pursue dual careers, out of a desire to "have it all" and find fulfillment in their careers, not out of economic necessity. But the exceptions are the boomer women who didn't pursue careers and ended up divorced without much in assets. Their economic situation is even more dire than the younger generations because they have a hard time catching up and keeping up with such a demanding economy.

prryho:

Good comment about the pain associated with a transition to enduring economic stagnation. The experience of Japan in the 1990s and through most of this decade can give us a clue of what we might expect. It's not a pretty picture. Austria after WWI (see Peter Drucker's memoir, "Adventures of a Bystander") or Germany in the 1920s provide additional historical analogies.

I know that Mitt Romney took a lot of slams on this blog some months ago, but I believe that he among the GOP candidates seemed most attuned to the dangers of systemic and irreversible economic decline for this country during the 21st century. I think it had something to do with his living in France back in the late 1960s :-)

Actually, I take the gridlock statement back. The country is really too messed up to hope for gridlock. We need to get our house in order. We have foreign policy and trade policy problems. Our health care system is a mess. We can't afford gridlock or incompetency in the White House for 4 more years.

So approximately one-quarter of a billion Americans think the country is moving in the wrong direction: 1/3 of billion wrong directions, no doubt.

The "old style orphanage," unless we propose to do it really authentically, with horrendous stats on abuse, illness, and mortality, is a lot more expensive than most of the alternatives. Gingrich proposed it way back when, until somebody showed him a budget for Boys Town, and he all of a sudden dropped the idea. And as for 15-year-old girls having nothing to say, has anybody looked at their cell phone bills lately? Or maybe it's just that the ones who can keep talking don't get pregnant?

Matty,

Your stats are a bit off...

You said: "Say 40.5% of the nation feels that Iraq has gone bad"

In reality, "More than six in 10 called the war not worth fighting" according to a Nov/07 Washington Post-ABC News poll.

You said the same percentage think "the president is a moron" when in fact more than 66% do.