Black Swans and the Unknown Unknowns

Catching up on Left, Right, and Center during my commute, my favorite guy on the show, Tony Blankley praised the reaction of the Federal Government last fall and this spring, saying the moves made first by the Bush Administration and later, the Obama Administration, helped stave off a total collapse of the world economy. He pointed out he will probably disagree with how the Obama administration decides to administer the ownership of GM and new regulations to the financial markets, but that the initial reaction to crisis, was successful.

This praise echoes similar claims made by Dick Cheney in recently defending the Bush Administrations anti-terror policies, which he claims saved the lives of thousands, if not, hundreds of thousands Americans.

How can we possibly evaluate these claims?

We can't. Remember Y2K? Did we stave off crisis or was the crisis overstated in the first place? Was the credit market seizure overstated or did we prevent disaster? Was the Islamic Terrorist threat overplayed post-9/11 or did we stem the a tide of attacks? Very confusing questions, I'm sure they will be debated for years to come.

With respect to the financial mess, basically, all we did was take out loans. Did we prevent disaster or kick disaster down the road? It seems clear that if we keep spending at this rate we will hit a point where we cannot reasonably expect to pay the interest on the debt. That constitutes total breakdown, if you ask me. It's the same as not being able to pay the monthly minimum on the credit card or the mortgage. Bankruptcy, basically. Even getting in that vicinity is terrifying. I guess what we all need to face is that we're in major, major hock and one day are gonna owe all this money. When times are good, taxes are going up, up, up. When the boomers retire, we're all going to be paying extra social security or the boomers are getting screwed. The rich are going to pay a lot and the only question is to what degree the middle and lower classes are also going to contribute. A lot, also, methinks.