Wednesday, 4 January 2012
Running Out of Road
I wasn't really listening, but over the New Year period, I couldn't help catching rather a lot of those lookaheads and looks back that pop up on the radio at the turn of every year. All were agreed that it had been a newsy year, one in which a heck of a lot happened - no arguing with that - though some thought 2012 could be the one in which things really kick off. There was much talk of a 'crisis of capitalism', of the 'failure of capitalism', even 'the death of capitalism'. Hang on a moment, I thought - couldn't recent events be equally plausibly interpreted as a crisis of socialism, even its death throes? 'Hard' socialism, on Soviet lines, died with exemplary dispatch 20-plus years ago, but 'soft' socialism survived and no one - until now? - doubted that it would go on and on. By soft socialism I mean the kind that takes money from taxpayers and spends it in a well-intentioned (and at times quite successful) attempt to make the world a better place. Then - because there's no natural end to this project - it runs out of money, so it starts borrowing, then borrowing more, until it's borrowing simply to service its ever-increasing debts, and eventually it runs out of road. That's probably happening now. Europe - at least the Eurozone - is broke, we're broke, America's broke. America owes more than any entity has ever owed in the history of the world. There is no prospect of any of us ever paying off these debts, even if the various attempts at 'austerity' actually rein in spending. What is to be done, beyond whistling Dixie and hoping for the best? I have no idea. The obvious solution - the traditional one - is to let rip with inflation, reducing the worth of those trillions of debt to billions, and the billions to millions, until - hey presto - you owe chickenfeed. However, it may be that human ingenuity will find a less damaging way of wiping out the debts this time, or at least reducing them to a manageable scale. Let's hope so - and meanwhile, buy silver bullion! That's what I'd be doing if I had any sense. But alas I haven't.