OPTIMISM VS PESSIMISM
By Karl Arnold Belser
28 August 2013
I hate being confused, especially about the future. I read articles like Do You Want to Scare a Baby Boomer? and I have pessimism about the future. Then, I read articles like Six Reasons the US will Dominate and I have optimism about the future again. Why am I so confused? I think the answer is the difference between tactics and strategy.
The first article is an article from the Economics Collapse Blog by Michael Snyer with an advertisement for a novel called The Beginning of the End by the same author. The name of Snyder's blog indicates that he has prejudged what the future will bring, which makes me skeptical of what he says. However, he does have facts which he proves by links to data sources. Consider the following facts from his article:
18. In 1945, there were 42 workers for every retiree receiving Social Security benefits. Today, that number has fallen to 2.5 workers, and if you eliminate all government workers, that leaves only 1.6 private sector workers for every retiree receiving Social Security benefits.
22. Overall, the Social Security system is facing a 134 trillion dollar shortfall over the next 75 years.
24. Medicare is facing unfunded liabilities of more than 38 trillion dollars over the next 75 years. That comes to approximately $328,404 for each and every household in the United States.
30. According to Northwestern University Professor John Rauh, the latest estimate of the total amount of unfunded pension and healthcare obligations for retirees that state and local governments across the United States have accumulated is 4.4 trillion dollars.
34. According to a recent survey conducted by Americans for Secure Retirement, 88 percent of all Americans are worried about "maintaining a comfortable standard of living in retirement".
These facts and the other facts in the article suggest that older people may be hurt financially in the future. The people in the private sector have,on the average, not saved enough to retire, and the government in the future may not have the resources to provide a living income by transfer payments. The people in the public sector have a more severe problem. What can't be paid, won't be paid. The government will probably have to scale back its public sector promises. These changes may be controversial and painful, but they will be done. Hence the actions are tactical.
The second article is, I think, more strategic in nature. I have some problem with the article because the author, A. Gary Shilling, does not give references to back up what he says. However, I have read Niall Ferguson's book Civilization: The West and the Rest which points out the structural advantages of the United States. in Furguson's opinion the advantages are
competition, science, the rule of law, medicine, consumerism and the work ethic. in addition George Freeman's book The Next 100 Years, based on research done at global intelligence company STRATFOR, points out that there are going to be huge economic stresses over the world and it will be difficult to predict what kind of response, including war, might occur. Freeman's assessment is that the United States is in a good strategic position to handle many possible Black Swans because of its abundant resources, its liberal immigration policies, its military superiority, and its access to both oceans.
Difficult times are, in my opinion, not a cause for pessimism, which in my view means giving up, but the time for the tough to tell the truth about the problems, accept this truth, and then figure out what to do to move ahead.
Last updated August 30, 2013
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