“Not even God himself could sink this ship.”
– Employee of the White Star Line, at the launch of the Titanic, May 31, 1911
“Whom the gods would destroy, they first make mad“
– from the Greek play Medea by Euripides
As it turned out, the confidence of the White Star employee regarding his ship’s ability to defy God was misplaced. Is America’s confidence that it can defy the laws of God with impunity similarly misinformed? No, it’s worse.
The difference between the Titanic and the current financial situation facing America is that the Titanic’s crew was merely reckless for travelling at high speeds through iceberg infested waters at night. They did not actually see the iceberg until it was too late to take effective action. At least when they saw it they tried to avoid it. America has seen the iceberg of insolvency for many years, and has not only ignored it but increased speed toward it. Furthermore, this has been done with all passengers on deck looking at it and loudly insisting that the captain maintain course and increase speed.
Our on-books debt is almost equal to our total national income. Our budget plan is to run trillion dollar deficits forever. But this is our little “ice cube” problem. Our off-books debt, consisting of our promises to pay “entitlements” such as Social Security, Medicare, Medicaid, and various public pensions is much worse. If we were to have enough money in the bank today to cover this future stream of expenses the amount would be somewhere between five and ten times our national income. The actual amount we have set aside is zero. This is our iceberg problem.
Nonetheless, the recent debt ceiling deal that created a “super committee” includes a provision to automatically slash defense and non-entitlement domestic spending by something like $1.2 trillion over ten years if the super committee cannot come up with something better. The design of the committee means it will either deadlock or raise taxes. In this economy, raising taxes will probably reduce federal income through reduced growth. For Tom McClintock’s thorough but depressing take on the deal read here.
So even after the great Tea Party rebellion of 2010 the balance of political power is still one that will let illegitimate entitlement spending devour the legitimate functions of government.
What will the metaphor of “hitting the iceberg” look like in real life? Here are the general features we can expect:
- The economy will slow and unemployment will rise.
- Government services will be cut back.
- Social disorder and crime will increase, over whelming the underfunded police, courts, and prisons. Something like in London.
- Pressure will grow to soak the rich, not only of income but of assets.
- Defense will be crippled and rogue nations and terrorists will be emboldened.
- America’s credit rating will be cut to junk.
- The dollar will cease to be the international currency. There is no viable replacement on the horizon. International trade will shrink.
- Polarization will increase. Local areas may start being under the control of local government and non-government entities.
- At some point the federal government will resort to serious inflation, followed by a replacement of the “old dollar” with the “new dollar” to steal the money out of your pocket and bank accounts.
10. The ability to do business internationally and within our borders will be severely impacted by all of this disorder, resulting in a massive reduction in living standards world-wide.
11. Radical political groups will emerge as the established power centers lose all credibility and legitimacy.
None of this is good, and none of it to be hoped for, any more than running into an iceberg just to punish the captain for being a bad captain is. But it is hard to see any other scenario.
Many Christians are counting on being raptured out of this kind of situation. I wouldn’t count on it. I think the Church is responsible for this calamity for its refusal to stand up for the Word of God, its compromising with the world, and its fantasy world escapism. One example: Abortion was “legalized” in 1973. Since then, less than 1% of pastors and churches have said one word or lifted one finger to resist this travesty and stand up for justice. Innocent blood pollutes a land and brings divine judgment. “Memo to file” opposition to abortion does not cut it.
At this point the question that emerges is what the individual can do to hopefully weather the storm. It is important for there to be a core of people who preserve both some assets and the right values and ideas if we are to emerge o the other side. Let me suggest a mental framework of three big things we each must do:
Get right with God. In a time of divine judgment you will want your prayers to be heard. You can have all the guns and gold you want, but it is God’s protection that will matter.
Work on your relationships. When the formal systems break down it is the informal ones that remain. When the police do not show up to save you from rioters you will want your neighbors to stand together. Patch up, expand and maintain your relationships with family, church members, neighbors, and business relations.
Get your act together. You do not want to bring unnecessary baggage into a tough situation. Work, hard, save money, and pay off debt. Make sure you are the last employee your boss would ever let go. Have a decent reserve of cash, food and emergency supplies on hand. You don’t want to run out of food or medicine (or ammunition) when the streets are unsafe.