America’s Four Horsemen

America’s Four Horsemen

Rodney D. Coates *



Sometimes we have entirely too much time to think about really scary things. Well, I have been preoccupied with a four letter word for more than a week now. That four letter word, more ominous then any other, really scares the stuff out of me is -debt. No not your usual debt, but what amounts to a major crises of epic, no biblical proportions. Words such as apocalypse, Armageddon, meltdown have already been used to describe the situation in which the American economy now faces, I choose to call it America’s Four Horsemen – National debt, trade imbalances, personal and corporate debt. These ‘horsemen’ - taken collectively, represent what I would estimate to be the greatest threat to our national security. I honestly believe that these four horsemen will replace our concerns with Iran or Korea, the Middle East and terrorists, or the incessant squabbling between republicans and democrats, or even who actually manages our respective ports. As important as these are, they are at least manageable –what seems out of control are the America’s four horsemen.



The federal debt, now over $8 trillion, means that every man, woman and child in America owes $27,000. Further, when we look at the unfounded Social Security and Medicare entitlements another $50 trillion may be added in the near future. As Kevin Phillips warns in Wealth and Democracy we are on a ticking bomb, not unlike many of the other “former” great powers of the world “at the peak of their economic power, become arrogant and wage great world wars at great cost, wasting vast resources, taking on huge debt, and ultimately burning themselves out."

These problems mirror what’s happening at the personal and corporate level. U.S. household debt, including mortgages, jumped from $6.4 trillion at year-end 1999 to $11 trillion by the end of the third quarter last year, a 72 percent increase, according to Federal Reserve statistics. According to a recent Harvard study, last year over 2 million personal bankruptcies were filed in the United States.

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The last of the four horsemen, corporate bankruptcy and debt reached an all time high last year. A total of 80 public companies filed for chapter 11 bankruptcy in 2005. It is telling to observe that while the pre-petition asset value of these companies was $134 billion, just a year ago, some 92 companies filed for bankruptcy with pre-petition asset value of only $47.7 billion.



These four-horsemen –our national debt, trade deficit, personal and corporate debt –are racing silently across America. Their swords are drawn, only a full scale attack by all at all levels will keep us from going the way of other great nations. Shall we sound the call, or shall we fall? The answer is actually up to us –we can begin by insisting that our national leaders redouble their efforts at fiscal restraint. The war and our expenditures in Iraq and the ever expanding war on terrorism must be curtailed, or more fiscally secure partners must be found to offset our costs. Pork and extraneous federal projects must be set aside as we go on a financial diet. We as American consumers are going to similarly decide if the latest gadget, computer, game system –is really that much better then the ones we purchased just a few years ago. Perhaps driving our cars for 2-3 extra years, insisting that more parts and production facilities are located in this country- can start us on the road to personal solvency. Both personal and corporate debt requires similar cost control measures. At the personal level, a national insurance or more assessable medical coverage is not only a good idea, but is increasingly necessary. Paying double, if not triple the minimum on credit card debt is a good start toward lowering credit card debt. Strict fiscal planning, coupled with a 3-5 year get out of debt program, will go a long way to reestablishing fiscal soundness in the American family. Alternatively, consumer savings, for short-term and retirement, must again become a priority. Lastly, our corporations must also discover creative and fiscally responsible ways to increase business while simultaneously increase profits. Similar to what I suggest for the personal, maybe the latest computer or blackberry is not needed. Maybe, we don’t need as many flights that are non-stop; perhaps reliance upon locally produced resources is better in the long run. Finally, only when we as a nation learn to maximize all of our resources –both physical and human – will we have the hope of totally defeating the 4 horsemen.



*Note: Rodney D. Coates is professor of sociology, gerontology and black world studies at Miami University. He can be reached at coatesrd@muohio.edu.



Rodney D. Coates

blogs:

social justice and reality

http://realityandjustice.blogspot.com/



Interesting Analysis.
Rocket RIver