By THOMAS L. FRIEDMAN — New York Times.
I am a 56-year-old baby boomer, and looking around today it’s very clear that my generation had it easy: We grew up in the shadow of just one bomb — the nuclear bomb. That is, in our day, it seemed as if there was just one big threat that could trigger a nonlinear, 180-degree change in the trajectory of our lives: the Soviets hitting us with a nuke. My girls are not so lucky.
Today’s youth are growing up in the shadow of three bombs — any one of which could go off at any time and set in motion a truly nonlinear, radical change in the trajectory of their lives.
The first, of course, is still the nuclear threat, which, for my generation, basically came from just one seemingly rational enemy, the Soviet Union, with which we shared a doctrine of mutual assured destruction. Today, the nuclear threat can be delivered by all kinds of states or terrorists, including suicidal jihadists for whom mutual assured destruction is a delight, not a deterrent.
But there are now two other bombs our children have hanging over them: the debt bomb and the climate bomb.
As we continue to build up carbon in the atmosphere to unprecedented levels, we never know when the next emitted carbon molecule will tip over some ecosystem and trigger a nonlinear climate event — like melting the Siberian tundra and releasing all of its methane, or drying up the Amazon or melting all the sea ice in the North Pole in summer. And when one ecosystem collapses, it can trigger unpredictable changes in others that could alter our whole world.
The same is true with America’s debt bomb. To recover from the Great Recession, we’ve had to go even deeper into debt. One need only look at today’s record-setting price of gold, in a period of deflation, to know that a lot of people are worried that our next dollar of debt — unbalanced by spending cuts or new tax revenues — will trigger a nonlinear move out of the dollar and torpedo the U.S. currency.
If people lose confidence in the dollar, we could enter a feedback loop, as with the climate, whereby the sinking dollar forces up interest rates, which raises the long-term cost of servicing our already massive debt, which adds to the deficit projections, which further undermines the dollar. If the world is unwilling to finance our deficits, except at much higher rates of interest, it would surely diminish our government’s ability to make public investments and just as surely diminish our children’s standard of living.
Unfortunately, too many conservatives, who would never risk emitting so much debt that it would tank the dollar, will blithely tell you on carbon: “Emit all you want. Don’t worry. It’s all a hoax.” And too many liberals, who would never risk emitting too much carbon, will tell you on emitting more debt: “Spend away. We’ve got plenty of room to stimulate without risking the dollar.”
Because of this divide, our government has not been able to put in place the long-term policies needed to guard against detonating our mounting debt bomb and climate bomb. As such, we’re in effect putting our kids’ future in the hands of the two most merciless forces on the planet: the Market and Mother Nature.
As the environmentalist Rob Watson likes to say, “Mother Nature is just chemistry, biology and physics.” That’s all she is. You can’t spin her; you can’t sweet-talk her. You can’t say, “Hey, Mother Nature, we’re having a bad recession, could you take a year off?” No, she’s going to do whatever chemistry, biology and physics dictate, based on the amount of carbon we put in the atmosphere, and as Watson likes to add: “Mother Nature always bats last, and she always bats a thousand.”
Ditto the market. The market is just a second-by-second snapshot of the balance between greed and fear. You can’t spin it or sweet-talk it. And you never know when that balance between greed and fear on the dollar is going to tip over into fear in a nonlinear way.
That is why I was heartened to see the liberal Center for American Progress stating last week that, while the stimulus is vital to rescuing our economy, the size of projected budget deficits demand that we also start thinking about broad-based tax increases and reductions in some spending and entitlement programs supported by liberals. I am equally heartened when I see Republicans like Gov. Arnold Schwarzenegger urging his party to start taking climate change seriously.
But we also need to act. If we don’t, we will be leaving our children to the tender mercies of the Market and Mother Nature alone to shape their futures.
This moment reminds me of an image John Holdren, the president’s science adviser, uses when discussing the threat of climate change, but it also applies to the dollar: “We’re driving in a car with bad brakes in a fog and heading for a cliff. We know for sure that cliff is out there. We just don’t know exactly where it is. Prudence would suggest that we should start putting on the brakes.”