For years American governments have failed to admit fully and then address the scale of the country’s debts. The chickens are coming home to roost.
A warning and negative assessment by Standard & Poores yesterday about the situation, and the reaction on international stock markets, has brought it into public scrutiny and added a new layer of urgency, but the options for resolving the debt are painful and possibly unacceptable to the public - and time is running out, because time has been wasted.
A collapse, partial or full, of the American financial system would impact every developed country and, coupled with the debt problems of a number of EU members and other insolvent nations create a position of instability like a house of cards falling down. When a house, whether made of paper or bricks, falls down it can be re-built either according to the original design or something fresh and new can be created.
My sense is that there will be a worldwide exposure of major cracks in the structure necessitating emergency action to deal with them, and that it will be soon - within the next year or so. For too long there has been an attitude of short-term hope over reality, usually driven by the desire for popularity and power in office and it is the time for the veils of illusion to be stripped away, revealing the truth beneath. It is inevitable that this will happen, and it has started already. It is good.
The challenge for leaders and politicians and we who elect them is what they do about the truth, and how they decide to re-build our house - for it belongs to all of us and so we have a say in what happens and a responsibility to ensure the new build is as good as it possibly can be. I talked yesterday about the power of thought and it could be helpful, as these opportunities for change are arising, to envisage a world where money is recognised as a loan or tool from God to be used fairly and wisely, helping humanity and the planet; where money is not the only form of tender but exchange and local community currencies are in general use where possible; and where there is simplicity and absolute transparency without vested power and interest.
We each of us can do much of this in our own lives and some are already. As you learn more about the development of global economic difficulties, as you will, you may wish to reflect gently upon a better way and a world you would like to see. It will help enormously.