Think about what that means. Going forward, somehow we have to raise
enough revenue to (1) pay for whatever
government we choose to have, which
we aren’t doing fully now; (2) pay the interest we’ve accumulated on past bills;
and (3) pay for the new expenses associated with an aging population and
expensive entitlement promises.
That’s going to require serious political leadership
and recognition by
Americans that the status quo is not an option. Simon Johnson, who had plenty
of experience with financial crises as the former chief economist for the
International
Monetary Fund, has noted, “Overborrowing always ends badly,
whether for an individual,
a company, or a country.”
5
During the first decade of
the new millennium, three parties borrowed heavily: consumers,
financial firms,
and the U.S. government. So far, two have paid a huge price for that leverage. Is
there another shoe to drop?
Those are just my questions. My hope is that by now you have more of your
own. The remarkable thing about economics is that once you’ve been exposed to
the big ideas, they begin to show up everywhere. The sad irony of Econ 101 is
that students
too often suffer through dull, esoteric lectures while economics is
going on all around them. Economics offers insight into wealth, poverty, gender
relations,
the environment, discrimination, politics—just to name a few of the
things we’ve touched upon. How could that possibly not be interesting?
