If you have a hankering for dystopic accounts of the future – and for reasons I cannot explain, I do – then Jim Bacon‘s Boomergeddon is the book for you. More importanly, his contribution is not via literature or art, but rather a hard-headed analysis of where America is and where he thinks it’s going (basically, for a default).
At the risk of being simplistic, Bacon’s 311 pages can basically be distilled to this: “our debt and deficits are huge; no one has the guts to reduce them; so people of my generation (note: Bacon is a self-described Baby-Boomer) who expect to be helped by entitlement program are toast.”
He rather remorselessly presents the evidence for it. If you want to know the true fiscal state of government in America, Boomergeddon is the best source, hands down. I would also add that he tells a convincing and detailed story about what could happen over the next twenty years.
There’s only one problem: he’s convinced it will happen, and it is this hopelessness for the future that leads me to part company with him.
Bacon is convinced that no one will put our fiscal house in order. He doesn’t think tax increases will fix the problem (at some point, that stone runs out of blood), and does not believe anyone has the political will to bring spending down.
I’m not so sure.
We tend to forget that the spend-spend-spend mentality of government is relatively new; for over two-thirds of its life, the American republic and its electorate did not treat government spending as the life-blood of the American economy. Keynesian economic thought was a reaction to the Great Depression, but it needed a political shift in the Western center-left from small government to big government in order to become politically dominant. It’s high point came in 1971, when Richard Nixon declared, “We are all Keynesians now” – effectively the intellectual surrender of the last political entity in the Western world that took issue with the theory.
For the Baby Boom generation, that effectively ended the economic discussion.
For the rest of us, well, it hasn’t been 1971 for a long time. In less than a decade, Keynesian received a double blow from reality (stagflation, which isn’t supposed to exist in the Keynesian world) and a slew of academic challengers (monetarism, rational expectations theory, and neoclassicalism). Even in the political world, “supply-side economics” (which, depending on the adherent, drew from all three and/or Keynesianism) challenged the orthodoxy.
Yet the political challenge to Keynesianism didn’t last long for two reasons: the increasing power of Boomers in American politics (still remembering Nixon’s line), and the fact that the greatest piece of evidence for Keynesianism (the American 1930s) was left largely unchallenged (although monetarism has made an effort to discuss the cause of the downturn). Thus, Keynesianism in the political world held sway even as academically it was knocked off its perch and forced to redefine itself (as New Keynesianism).
Thus, any attempt to reduce spending ran into political Keynesianism (and usually did not do well). Bacon himself refers multiple times to the Keynesian effect on the economy, and how just about any attempt to cut spending will be met with you’ll-cause/exacerbate-a-recession naysayers.
However, in 2010, that Keynesian political consensus is breaking down. FDR’s New Deal is getting another look – and the old public-spending-saved-the-world account is taking a beating. Several economists came out to oppose the Demcorats’ stimulus and the interpretations behind it. Even when White House economists tried to defend the stimulus with Old Keynesian assumptions, New Keynesians andothers from leading institutions took aim and obliterated them.
I sincerely doubt that Bacon, as he was writing Boomergeddon considered world where the International Monetary Fund and the European Central Bank were telling policy makers that government spending would lead to weak economic growth, or where Harvard was home to leading economists dismissing the notion behind Keynesian stimulii.
Yet that’s the world in which we live today. While nearly every other academic field has lunged leftward, economics has moved rightward over the last forty years. This fact remained largely unknown to the rest of the world (including nearly everyone in politics) – until now.
Changes like this tend to happen without anyone noticing at first. When Canada passed the Saudis as the biggest exporters of oil to the United States in 2004, hardly anyone caught on. Even today, the politics of oil imports still lags behind the economics of it. The European Coal and Steel Community made few waves in 1954, but has now become the behemoth known as the EU. When the Communists took power in Russia in 1917, the New York Times was more upset about a potential Communist running for Mayor of New York.
In this case, we’re talking about the intellectual foundation for decades of resistance to austerity collapsing in a heap.
In fact, the consequences are already being felt. Bacon express disgust at the fact the Paul Ryan’s Roadmap gets little support from the House Republican caucus. What he doesn’t seem to notice is that Ryan himself is considered a shoo-in for re-election (in Les Aspin’s old seat, no less) despite calling for dramatic entitlement reform. In Florida, Mark Rubio openly called for raising the Social Security eligibility age, and he not only chased a sitting governor out of a primary, but may also get over 50% in a three way race.
Neither would have been anything but laughable twenty or even ten years ago.
Now, I still consider Bacon’s book invaluable. Boomergeddon is a warning every American should read, and heed. I just happen to think more Americans will heed it than he thinks will.
Cross-posted to VV