As the title of the blog indicates, I’m not the best sleeper. And James Fallows has cost me about as much sleep as anybody else I can think of. His clever memo of economic disaster to the President taking office in 2016 was three years ago:
And now, a Tinker-Evers-Chance explication of why our $1 billion per day borrowing habit from China may prove our undoing:
China has grown at 9% per year for the last 30 years and still enforces a roughly 50% savings rate on its people (vs. about 25% in India). The U.S. savings rate is zero to slightly negative, and hasn’t been above 10% in two generations. Chinese, Japanese, Russian and Middle Eastern investors have had negative returns on their supposedly uber-safe U.S. Treasury investments, adjusted for inflation and dollar depreciation for the last four years. The U.S. is $9.3 trillion or so in debt, and will run a $.5 trillion deficit next year.
Other than that everything is dandy.
Our nation is officially in the grip of the logic of the alcoholic: since I’m already hammered, what harm is one more drink? What’s needed is a national 12-step program that our political institutions are not set up to provide. This sets up as the most daunting leadership challenge since Churchill faced in WWII. The scariest part is that it’s a challenge which can probably be ducked entirely–for another Presidential term or maybe even five.