Robert Rubin, President Clinton’s Secretary of the Treasury had a great op-ed piece in the Wall Street Journal yesterday. He said there’s five basic risks facing the U.S. if we fail to get our fiscal house in order. They are and I quote directly from his piece:
1)Government borrowing risks crowding out private investment
2)Our unsustainable fiscal outlook undermines business confidence by creating uncertainty about future policy
3) Deficits constrain our capacity to make the public investment critical to competitiveness, growth and widespread income gains
4) Deficits hamper our financial ability to cope with economic weakness or geopolitical events
5) Our fiscal position creates a strong potential for some form of severe macroeconomic distress at an unpredictable time: high inflation, high interest rates and low confidence in the future that produce an extended period of slow or negative growth, or a harsh financial crisis
The bulk of my recent posts have a common theme which is the U.S. Government and financial literacy. The reason I keep harping on this is because government is the single greatest influence on our individual financial worlds. It’s all about context. It’s the pool we’re all swimming in. If the context, the overall environment, is bad it’s really hard to achieve one’s financial goals.
Civics 105 was a suggested plan of action for President Reagan. Rubin above describes the current environment.
We as citizens need to work this out through our elected officials, if not now when?