Lashing Ourselves Together

Tom Friedman puts a good face on the Obama economic plan:

My own sense is this: The Obama package represents the sum total of what was minimally necessary to prevent systemic breakdown, what was politically possible with a Congress that was in no mood to shell out another dime to bail out Wall Street, and what was operationally preferable — at this time — which was a strategy that did not require nationalizing Citigroup & Friends.

The Obama strategy, said Robert Hormats, the vice chairman of Goldman Sachs International, “is based on the idea of mutual reinforcement, that when you put it all together — the money stimulating growth, the money relieving the credit crunch in the housing sector, the money injected by the Federal Reserve to lower rates, and the various initiatives to heal the banks without nationalization — you’ll get a boost to the economy that will be greater than the sum of its parts.”

This is logical, and I can understand it as a plausible strategy. My problem is that I don't see how we escape that easily from our last 30 years of mindless borrowing and spending.

We are in debt up to our lips, and that means that one way or another--through inflation, dollar devaluation, reduced incomes, reduced spending and increased saving (in other words, a significantly lowered standard of living), or a combination of all these--we're going to be paying it off for a long time to come. And in the middle of all this, we have to start producing real wealth again by making real things that we and others want to buy. (Did I mention resource depletion and climate change to complicate matters?)

We are, in other words, in brand new territory as a nation, somewhere we haven't been before. We can't really see the way ahead, and we don't know whether there a sheer cliff just ahead of us that we're going to fall off, or a lovely meadow with flowers and a lake.

It is a frightening time of uncertainly. But we're all in it together, and we need to lash ourselves to one another with ropes just in case. And that's what Obama has been doing over there in Europe.