Thursday, December 31, 2009
US in fiscal peril with $12.1 trillion debt
The figures from the article are staggering. In 10 years, the yearly amount of interest alone that the U.S. government would paying would be $800 billion to $1 trillion dollars. That would equal well over one-quarter of today's federal budget, and we would get nothing tangible (defense, health care, roads) out of it.
Tuesday, December 29, 2009
10 Major Events That Defined This Past Decade
As you now know, I have started this blog for a few reasons. First, I like to write, and I also like to keep up with current events and politics. So, this is a combination of the two. Second, I think it is important to sound off ideas and thoughts with others on such topics that affect us individually and as a nation. Many of us will have unique opportunities in the future to shape at least a little bit of the world around us. Understanding multiple sides of an issue will therefore be crucial to our success. With this in mind, I hope you will contribute your own thoughts to this blog, and if there is a topic you think is important, feel free to email me.
I thought a useful, albeit potentially trite, way to start this blog would be to list out some of the events that both defined this closing decade and will impact this new decade. I think such a list would be useful possibly as a way to frame certain other future discussions. I limited the list to three types of events: 1) current affairs; 2) business events; and 3) political events. Therefore, although some might find Red Sox's World Series title or the rise of Kanye West earth-shaking, such things were not included. So, without further ado, here is my list on the top 10 major events of this closing decade.
1. Terrorists attack the World Trade Center and the Pentagon. September 11, 2001. The impact of this event cannot be underestimated and cannot be effectively communicated in a few short lines. In the matter of a few hours, the entire world changed, and almost everyone in this country remembers where they were. A President, who campaigned on the idea of no "nation building," reversed course and began to assert American power throughout the world. "Pax Americana" began to end. The world began its shift from a unipolar to multi-polar structure. Decades-old alliances between the "New World" and "Old World" would come under strain. Conflicts between States and non-States became center stage. The threat of terrorism began to emerge in ordinary Americans' every day lives.
2. Oil prices hit an all-time high of $147.27 per barrel. July 11, 2008. To put this in perspective, the price of oil per barrel in January 1999 was $17. Multiple wars in the Middle East, the surging economies of "developing" countries such as India and China, and a weakening dollar all contributed to this. There was serious talk of $200 per barrel oil. Since 2008, however, oil prices have retreated, but most expect oil to remain at levels at least $70 per barrel. The impact of this event, however, may be yet to come. If these prices are sustained, or increase, other alternative sources of fuel become economically attractive. Ultimately, this may herald the end of the "Hydrocarbon Age" for mankind.
3. Games of the XXIX Olympiad open in Beijing, China. August 8, 2008. The People's Republic of China had perhaps the greatest coming out party for a country in the past 100 years. The opening ceremonies of the Summer Games gave notice to the world of the country's current and potential power, which was all the more impressive given that U.N. recognition came only in 1972, just 36 years before. The world's largest country by population has the world's largest military and is the third largest economy by nominal GDP. Furthermore, the United States government directly owes the government of China approximately $800 billion dollars in the form of U.S. Treasuries--and this is only half of the estimated $1.6 trillion worth of U.S. securities held by Red China.
4. Euro coins and bank notes enter circulation. January 1, 2002. The road to European integration started decades earlier, but the replacement of national currencies with the Euro marked a significant and highly visible step to a world with one unified Europe. The European Union currently has over 500 million citizens and would have the world's largest economy by nominal GDP at over $18 trillion. It seems likely that Europe will continue toward a single State thereby giving it as much influence in world affairs in the future as the United States, China, and Russia.
5. The United States Supreme Court decides Bush v. Gore. December 13, 2000. It is historically fitting that one of the most controversial Presidents came to power under a cloud of controversy. The Justices who decided this case could not have foreseen the attacks of 9/11 or any of the subsequent events in the decade. At the time of this case, those Justices did not, and could not, care. To this day, many people believe, erroneously, that the Supreme Court's conservative justices handed the Presidency to George W. Bush. This belief further politicized the nomination process to the bench and created new questions on the role of the Court in the United States.
6. Ben Bernanke becomes Federal Reserve Chairman. February 1, 2006. History will determine how it views Ben Bernanke and his role as Federal Reserve Chairman. A believer in Milton Friedman's monetarist theories, Bernanke did his doctoral thesis on the Great Depression, and perhaps it was fate that meant he was at the helm of the Federal Reserve when the threat of another Great Depression arose in 2008. In an effort to avert catastrophe, Bernanke has thrown everything but the kitchen sink at the problem thereby resulting in unprecedented federal intervention in the economy. Whether this sets bad precedent, or has created its own problems, remains to be seen. Needless to say, he is sure to have given future generations of doctoral candidates something to write about.
7. NASDAQ reaches 5132.52. March 10, 2000. With this current economic crisis in progress, it is easy to forget that this decade started with the bursting of the dot.com bubble. The NASDAQ still hasn't even come close to its all time highs; on December 28, 2009, the NASDAQ closed at 2291.08, down over 55%. Trillions of dollars of paper wealth vanished, but interestingly enough, the lessons from this bubble burst weren't learned. This collective mistake would lead to the housing market bubble and a near financial calamity just a few years later.
8. Lehman Brothers declares bankruptcy. September 15, 2008. This event was both the culmination of the sub-prime crisis/housing-bubble burst as well as the introduction of the worst financial crisis since the Great Depression. In the months leading up to this event, the housing bubble threat wasn't known to ordinary American citizens. In some ways, that remained the case immediately afterwards. The financial markets, however, were in near panic, and former President Bush and his administration was forced to take unprecedented steps in an effort to avert disaster. Both long term and short term lending came to a crashing halt. The event ultimately impacted the 2008 Presidential Election. Of the 15 major polls conducted from September 7 to September 14, John McCain led in 7, was tied to Barack Obama in 4, and was behind in 4. After September 15, only two conducted polls (both in September) would ever show McCain ahead.
9. An Inconvenient Truth opens in the United States. May 24, 2006. Few movies like An Inconvenient Truth can claim to impact world affairs. Although it is true that carbon emissions have been considered a problem for years (e.g. the Kyoto Treaty), this documentary made the argument in a dramatic and vivid way. Regardless of whether or not the film was factually accurate, it did reignite discussion about the topic of global warming. A poll found that 69% of those who watched the documentary changed their minds about global warming with 89% saying they became more aware of the topic.
10. Youtube is founded. February 15, 2005. Any number of technological advances could have made this list, but nothing has had the same impact as Youtube. Today, every politician and public citizen fears having a "Youtube moment" whether real or fabricated. These politicians and public citizens now have to tread extraordinarily carefully in their public statements, which may have an unknown effect on public transparency and accountability. Alternatively, Youtube can also serve as a way for public figures to communicate their message. Finally, major world events can be recorded by ordinary citizens and instantly uploaded.
I thought a useful, albeit potentially trite, way to start this blog would be to list out some of the events that both defined this closing decade and will impact this new decade. I think such a list would be useful possibly as a way to frame certain other future discussions. I limited the list to three types of events: 1) current affairs; 2) business events; and 3) political events. Therefore, although some might find Red Sox's World Series title or the rise of Kanye West earth-shaking, such things were not included. So, without further ado, here is my list on the top 10 major events of this closing decade.
1. Terrorists attack the World Trade Center and the Pentagon. September 11, 2001. The impact of this event cannot be underestimated and cannot be effectively communicated in a few short lines. In the matter of a few hours, the entire world changed, and almost everyone in this country remembers where they were. A President, who campaigned on the idea of no "nation building," reversed course and began to assert American power throughout the world. "Pax Americana" began to end. The world began its shift from a unipolar to multi-polar structure. Decades-old alliances between the "New World" and "Old World" would come under strain. Conflicts between States and non-States became center stage. The threat of terrorism began to emerge in ordinary Americans' every day lives.
2. Oil prices hit an all-time high of $147.27 per barrel. July 11, 2008. To put this in perspective, the price of oil per barrel in January 1999 was $17. Multiple wars in the Middle East, the surging economies of "developing" countries such as India and China, and a weakening dollar all contributed to this. There was serious talk of $200 per barrel oil. Since 2008, however, oil prices have retreated, but most expect oil to remain at levels at least $70 per barrel. The impact of this event, however, may be yet to come. If these prices are sustained, or increase, other alternative sources of fuel become economically attractive. Ultimately, this may herald the end of the "Hydrocarbon Age" for mankind.
3. Games of the XXIX Olympiad open in Beijing, China. August 8, 2008. The People's Republic of China had perhaps the greatest coming out party for a country in the past 100 years. The opening ceremonies of the Summer Games gave notice to the world of the country's current and potential power, which was all the more impressive given that U.N. recognition came only in 1972, just 36 years before. The world's largest country by population has the world's largest military and is the third largest economy by nominal GDP. Furthermore, the United States government directly owes the government of China approximately $800 billion dollars in the form of U.S. Treasuries--and this is only half of the estimated $1.6 trillion worth of U.S. securities held by Red China.
4. Euro coins and bank notes enter circulation. January 1, 2002. The road to European integration started decades earlier, but the replacement of national currencies with the Euro marked a significant and highly visible step to a world with one unified Europe. The European Union currently has over 500 million citizens and would have the world's largest economy by nominal GDP at over $18 trillion. It seems likely that Europe will continue toward a single State thereby giving it as much influence in world affairs in the future as the United States, China, and Russia.
5. The United States Supreme Court decides Bush v. Gore. December 13, 2000. It is historically fitting that one of the most controversial Presidents came to power under a cloud of controversy. The Justices who decided this case could not have foreseen the attacks of 9/11 or any of the subsequent events in the decade. At the time of this case, those Justices did not, and could not, care. To this day, many people believe, erroneously, that the Supreme Court's conservative justices handed the Presidency to George W. Bush. This belief further politicized the nomination process to the bench and created new questions on the role of the Court in the United States.
6. Ben Bernanke becomes Federal Reserve Chairman. February 1, 2006. History will determine how it views Ben Bernanke and his role as Federal Reserve Chairman. A believer in Milton Friedman's monetarist theories, Bernanke did his doctoral thesis on the Great Depression, and perhaps it was fate that meant he was at the helm of the Federal Reserve when the threat of another Great Depression arose in 2008. In an effort to avert catastrophe, Bernanke has thrown everything but the kitchen sink at the problem thereby resulting in unprecedented federal intervention in the economy. Whether this sets bad precedent, or has created its own problems, remains to be seen. Needless to say, he is sure to have given future generations of doctoral candidates something to write about.
7. NASDAQ reaches 5132.52. March 10, 2000. With this current economic crisis in progress, it is easy to forget that this decade started with the bursting of the dot.com bubble. The NASDAQ still hasn't even come close to its all time highs; on December 28, 2009, the NASDAQ closed at 2291.08, down over 55%. Trillions of dollars of paper wealth vanished, but interestingly enough, the lessons from this bubble burst weren't learned. This collective mistake would lead to the housing market bubble and a near financial calamity just a few years later.
8. Lehman Brothers declares bankruptcy. September 15, 2008. This event was both the culmination of the sub-prime crisis/housing-bubble burst as well as the introduction of the worst financial crisis since the Great Depression. In the months leading up to this event, the housing bubble threat wasn't known to ordinary American citizens. In some ways, that remained the case immediately afterwards. The financial markets, however, were in near panic, and former President Bush and his administration was forced to take unprecedented steps in an effort to avert disaster. Both long term and short term lending came to a crashing halt. The event ultimately impacted the 2008 Presidential Election. Of the 15 major polls conducted from September 7 to September 14, John McCain led in 7, was tied to Barack Obama in 4, and was behind in 4. After September 15, only two conducted polls (both in September) would ever show McCain ahead.
9. An Inconvenient Truth opens in the United States. May 24, 2006. Few movies like An Inconvenient Truth can claim to impact world affairs. Although it is true that carbon emissions have been considered a problem for years (e.g. the Kyoto Treaty), this documentary made the argument in a dramatic and vivid way. Regardless of whether or not the film was factually accurate, it did reignite discussion about the topic of global warming. A poll found that 69% of those who watched the documentary changed their minds about global warming with 89% saying they became more aware of the topic.
10. Youtube is founded. February 15, 2005. Any number of technological advances could have made this list, but nothing has had the same impact as Youtube. Today, every politician and public citizen fears having a "Youtube moment" whether real or fabricated. These politicians and public citizens now have to tread extraordinarily carefully in their public statements, which may have an unknown effect on public transparency and accountability. Alternatively, Youtube can also serve as a way for public figures to communicate their message. Finally, major world events can be recorded by ordinary citizens and instantly uploaded.
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