Well not for a while but within the life span of our kids (if anyone bothers to have more than one). Is this about the second coming? No, it’s about decline of the West. More specifically about the unsustainable social welfare state. Now don’t get me wrong I believe that we should help those in need, but surely not at the cost of future generations. What am I talking about? I’m talking about debt.

I can’t think of a single modern Western welfare state that isn’t racked with debt. All for what? To kept the economy from recession, what a waste. Anyone who done any economics studies at school will know that booms & busts are how the economy works. If an economy is in a bubble it will eventually correct itself no matter how much money one throws at it. The bigger the bubble the bigger the bust. Basically what we’ve done to avoid recession is stolen from the next generation to pay to keep the recession away for a little longer. The day of Reckoning will strike and no amount of stimulus packages will save us (no one will have any money to lend). Basically the west is involved in a form of inter-generational tyranny, making them pay for our (and our father’s) unsustainable lives. Now I’m not advocating that we form a massive hippy commune with free love, sex, drugs, rock ’n’ roll and everything else (is there much else :P). We need something that is nationally and globally sustainable.

Currently the PIGS (Portugal, Italy, Greece & Spain) are the big worry when it comes to debt. But they shrink in comparison to Japan. The Japs for every Dollar they earn owe two Dollars (their debt is 198% of GDP). Japan’s economy had been in taters since the Asian financial crisis of 1998. Co-hosting the 2002 World Cup saw Japan’s economy “stimulated” by the construction of stadia using government funds. One of the Islands that had a stadium built on it would fit the entire population of the Island. Is that really forethought? “But its infrastructure” is a common argument I’ve heard about the Labor GFC Stimulus package. Yes but infrastructure is only beneficial if it’s used. Japan’s other problem (like most western nations) is it’s ageing population. Unlike other most other nations you pretty much can’t emigrate to Japan. So there is no influx of young workers to fill the gap.

The Important thing is balance. Liaise fair approach to markets enables all kinds of things to go wrong. Just look at BP and the US sub-prime markets. But to strict regulations hampers growth & innovation. But perpetual growth is unsustainable. To ensure the growth that is ‘required’ to keep a social welfare state functioning the population must grow. Western population pyramids are skewed nowadays as younger couples are not having kids (for various reasons). So the answer that western governments have is to import skilled migrants to make up for the lack of children.

So how do we create a sustainable global society? That is the big question. What things must we give up or cut back?

I’m not young enough to know everything anymore so I don’t have a complete or total answer. I’m (hopefully) going to address this with some solutions next time. Some of which I’m sure will annoy the PC people of this world.