Sunday, September 26, 2004

Good intentions

When religious leaders speak passionately about something their very show of emotion is sometimes enough to prompt a reaction by those listening.

The Rabbi's Yom Kippur sermon got me thinking.

He got me considering doing things I hadn't thought of doing before; such as attending a protest march in the street.

What I realized is that he got me thinking of doing things I neither wanted to do nor had ever thought of doing before.

This concerned me.


While someone living a comfortable life has no strong incentive to correct the inequalites of the world, someone who is far less well off is very easy to convince of the need to take some form of 'action'.

What shape and form this action might take is left up to listeners.

Sitting in a New York church, I wasn't amongst a crowd of people likely to engage in any form of violence protest.

However, if transplanted into the Middle East or any other place where violence and poverty are far more widespread, I might expect a different response.

In a region where religion and religious beliefs are enbedded in everyday life, religious leaders have far more reponsibility.

This means they need a game-plan. If they don't then their good intentions could result in an even more violent world.

Tuesday, September 07, 2004

Addicted to debt

Everybody has something they are prone to liking too much for their own good.

For the government, debt falls very neatly into this category. Given the opportunity they just can't get enough of it.

For people in power only a short period of time, going deeper into debt is a win-win situation. The more they spend, the more popular they get, at the expense of people they aren't accountable to.

But all is not lost, right? The U.S. economy will grow faster, making the government finances healthier?

Wrong. For two big reasons: the war on terror and baby boombers.

These are two problems that can't be fixed and have huge costs associated with them.

Add to that modest economic growth not capable of generating the types of tax revenues enjoyed in past upturns and you get a very nasty surprise ahead.


At the moment we are enjoying low interest rates, mainly because of low inflation. However, this has only made it easier for the government to get it's fix of debt without anyone noticing.

Until now.

Record government deficits have made headline news but they're still not that interesting to most people. That's mainly because it doesn't affect the majority of us.

This is going to change, fast.

The first thing we are going to notice is that the government's huge borrowing requirment isn't going to go away as quickly as it did in the past.

Then we are going to notice higher taxes and this is going to make things a lot worse.


You know things have gotten really bad when the government starts raising taxes. It's something they are loath to do and usually end up regretting (i.e. they get the boot, first chance people get).

This is going to happen in the very near future. When it does people are going to blame the government and they should. Only thing is, it's not the present leaders they should pin the blame on but those from the past.

** Afterthought **

An absurd moment at today's testimony by Fed Chairman Alan Greenspan to the U.S. Senate had certain politicians lauding "His Excellency" for bringing with him the solutions to all the future debt problems: Pay as You Go.

This scheme, whereby the working population funds the retirement costs for the present elderly, is a very leaky boat.

The debate is a debate and not a problem with a unique solution. There are a number of solutions to the problem.

The first unambiguously positive step is to get people more active and eduacated about investing. Once people understand that they are responsible for their future wealth they can go ahead and ensure they have enough of it.