Monthly Newsletter: The Big Crisis is Coming by Oliver DeMille

Published: Wed, 12/01/10

"Empowering Ordinary Citizens to Make an Extraordinary Difference"

The Big Crisis is Coming

By Oliver DeMille

Note: If you like this article, you'll love Oliver's latest book, FreedomShift: 3 Choices to Reclaim America's Destiny, which addresses the future of American and what to do about it.

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"By 2020, the U.S. will be spending $1 trillion a year just to pay the interest on the national debt. Sometime between now and then the catastrophe will come. It will come with amazing swiftness." -David Brooks, New York Times Columnist

A BIG CRISIS IS COMING. From the story of the boy who cried, "Wolf!" to the crime of calling "Fire!" in a crowded theater, our society has a pretty low tolerance for alarmists.

They're irresponsible, sensational, not to be believed.

One sure way to be ejected from the "Inner Ring" is to promote theories of conspiracy, to predict disaster or to in any other way suggest that our Progressivist trajectory is gravely off-course.

But what about when there is a wolf? Well, sure; the idea that there really is a wolf has agitated the fevered minds of crackpots and fringies since--forever.

And their animated efforts to alert the world to the threats that supposedly imperil us, to "wake us up" (regardless of our disinterest or our criticism) is perhaps the best indication that there's no merit in their warning--or so says popular opinion.

This makes it all the more curious, awkward and (dare we say?) disturbing when a chorus of alarms is heard coming from the established intelligentsia, from the acknowledged "experts" and thought leaders--the most credible voices in The Great Conversation.

And this is exactly what is taking place right now.

History is, of course, full of cranks and doomsayers, and the wise learn to talk in moderated tones and look at the evidence with clinical objectivity.

And yet in our time even many of our most objective, credible, detached, understated, methodical and consistently rational thinkers are predicting significant difficulties ahead--often in dramatic and even sensational terms.

Twenty Quotes Every American Should Read Today

For example, consider the following thoughts from some of our most tempered and prudent authorities. I have arranged these in a Top 20 list of great quotes; all 20 are an important commentary on our modern world and the decade ahead.

1. Peggy Noonan, The Wall Street Journal

"I think there is an unspoken subtext in our national political culture right now. In fact I think it's a subtext to our society. I think that a lot of people are carrying around in their heads, unarticulated and even in some cases unnoticed, a sense that the wheels are coming off the trolley and the trolley off the tracks."

2. William Strauss & Neil Howe, The Fourth Turning

"Wherever we're headed, America is evolving in ways most of us don't like or understand. Individually focused yet collectively adrift, we wonder if we're headed toward a waterfall . . . a decisive era of secular upheaval, when the values regime propels the replacement of the old civic order with a new one."

3. David Brooks, The New York Times

"Elections come and go, but the United States is still careening toward bankruptcy. By 2020, the U.S. will be spending $1 trillion a year just to pay the interest on the national debt. Sometime between now and then the catastrophe will come. It will come with amazing swiftness. The bond markets are with you until the second they are against you. When the psychology shifts and the fiscal crisis happens, the shock will be grievous: national humiliation, diminished power in the world, drastic cuts and spreading pain."

4. Niall Ferguson, Newsweek

"This is how empires decline. It begins with a debt explosion."

5. Roger C. Altman & Richard N. Haas, Foreign Affairs

"The U.S. government is incurring debt at a historically unprecedented and ultimately unsustainable rate... As the world's biggest borrower and the issuer of the world's reserve currency, the United States will not be allowed to spend ten years leveraging itself to these unprecedented levels. If U.S. leaders do not act to curb this debt addiction, then the global capital markets will do so for them, forcing a sharp and punitive adjustment in fiscal policy. The result will be an age of American austerity. No category of federal spending will be spared, including entitlements and defense. Taxes on individuals and businesses will be raised. Economic growth, both in the United States and around the world, will suffer. There will be profound consequences, not just for Americans' standard of living but also for U.S. foreign policy and the coming era of international relations."

6. Joseph S. Nye, Jr., Foreign Affairs

"The Congressional Budget Office calculates that total government debt will reach 100 percent of GDP by 2023..."

7. Roger C. Altman & Richard N. Haas, Foreign Affairs

"The International Monetary Fund (IMF) staff paper comes closer to the mark by projecting that federal debt could equal total GDP as soon as 2015. These levels approximate the relative indebtedness of Greece and Italy today. Leaving aside the period during and immediately after World War II, the United States has not been so indebted since recordkeeping began, in 1792... State and local governments also owe huge amounts, on the order of $3 trillion."

8. Don Peck, The Atlantic

"The Great Recession may be over, but this era of high joblessness is probably just beginning. Before it ends, it will likely change the life course and character of a generation of young adults... It could cripple marriage as an institution in many communities... Ultimately, it is likely to warp our politics, our culture and the character of our society for years come...The economy now sits in a hole 10 million jobs deep...[and] we need to produce roughly 1.5 million jobs a year--about 125,000 a month--just to keep from sinking deeper. Even if the economy were to immediately begin producing 600,000 jobs a month--more than double the pace of the mid-to-late 1990s, when job growth was strong--it would take roughly two years to dig ourselves out of the hole we're in... But the U.S. hasn't seen that pace of sustained employment growth in more than 30 years..."

9. Ken Wilber, A Theory of Everything

"We are awaiting the new global founding Fathers and Mothers who will frame an integral system of governance that will call us to our more encompassing future . . ."

10. Andreas Kluth, The Economist

"And yet, who would be California's 'Founding Fathers'? Thomas Jefferson, absent from Philadelphia as a minister to France, called the 55 delegates chosen by the states 'demi-gods'. These were men such as James Madison, deeply versed in Aristotle, Cicero, Locke and Montesquieu, who preferred the word 'republic' to 'democracy' for fear that the latter might evoke the chaos of ancient Athens... But can lay people be expected to assume the responsibilities of a Madison?"

11. Thomas Friedman, The New York Times

"We are in a country in debt and in decline--not terminal, not irreversible, but in decline. Our political systems seem incapable of producing long-range answers to big problems or big opportunities."

12. Larry King, Larry King Live

"A recent CNN Opinion Research Poll [asked]: 'Do you think the federal government has become so large and powerful that it poses a threat to the rights and freedoms of ordinary people?' Fifty-six percent of Americans said yes."

13. Joseph S. Nye, Jr., Foreign Affairs

"In 2010, a poll by the Pew Research Center found that 61 percent of respondents thought the United States was in decline, and only 19 percent trusted the government to do what is right most of the time. In 1964, by contrast, three-quarters of the American public said they trusted the federal government to do the right thing most of the time."

14. David Brooks, The New York Times

"The essence of America is energy--the vibrancy of the market, the mobility of the people and the disruptive creativity of the entrepreneurs. This vibrancy grew up accidentally, out of a cocktail of religious fervor and material abundance, but it was nurtured by choice. It was nurtured by our founders, who created national capital markets to disrupt the ossifying grip of the agricultural landholders. It was nurtured by 19th-century Republicans to build the railroads and the land-grant colleges to weave free markets across great distances. It was nurtured by Progressives who broke the stultifying grip of the trusts...The task ahead is to save this country from stagnation and fiscal ruin. We know what it will take...The Democratic Party...does not seem to be up to that coming challenge (neither is the Republican Party)."

15. Fareed Zakaria, Newsweek

"The world has shifted from anti-Americanism to post-Americanism . . . The distribution of power is shifting, moving away from American dominance."

16. Philip Bobbitt, The Shield of Achilles

"We are entering a period, however, when very small numbers of persons, operating with the enormous power of modern computers, biogenetics, air transport, and even small nuclear weapons, can deal lethal blows to any society. Because the origin of these attacks can be effectively disguised, the fundamental bases of the State will change . . . We are entering a fearful time, a time that will call on all our resources, moral as well as intellectual and material."

17. Thomas Friedman, The New York Times

"I heard a phrase being bandied around here by non-Americans--about the United States--that I can honestly say I've never heard before: 'political instability.' [This] was a phrase normally reserved for countries like Russia or Iran or Honduras. But now, an American businessman remarked to me, 'people ask me about political instability in the U.S. We've become unpredictable to the world'....We're making people nervous."

18. Joe Klein, Time

"Many Americans also were confused and frustrated by the constant state of war since the terrorist attacks of 9/11. But for every occasion they raised Afghanistan, they mentioned China 25 times...'The great fear is about American supremacy,' said Anne Mariucci...'We all believed that if you followed the basic compact, worked hard and played by the rules, that we'd have the highest standard of living in the world. And we were always on the front edge of the next new technology--but we're not anymore. We seem to be mired in mediocrity while China is steaming ahead.'"

19. Ken Kurson, Esquire

"Today's brutal economy and credit freeze should have most entrepreneurs running for cover, or at last signing up for the 99 weeks of unemployment our Congress has generously provided, courtesy of our kids and grandkids. Instead, many steel-stomached small business people are using this crisis as an opportunity to expand."

20. Alvin Toffler, The Third Wave

"There are powerful reasons for long-rang optimism, even if the transitional years immediately ahead are likely to be stormy and crisis ridden."

One More Thing: The Rise of China

On the issue of China, Peggy Noonan said in The Wall Street Journal:

"People are freshly aware of the real-world implications of a $1.6 trillion deficit, of a $14 trillion debt. It will rob American of its economic power, and eventually even of its ability to defend itself. Militaries cost money. And if other countries own our debt, don't they in some new way own us? If China holds enough of your paper, does it also own some of your foreign policy? Do we want to find out?"

Also consider these quotes from my book FreedomShift:

"Note that China, the second largest economy in the world, has huge savings (unlike the former Soviet Union or the current United States) and is a major buyer of U.S. debt. China has three of the world's four largest banks, the two largest insurance companies and the second largest stock market. With all this, the Communist Party remains in control; it also remains firmly communistic in philosophy and is, if possible, increasingly totalitarian."

"China has a huge surplus of government and also private savings, and it wants to invest in the United States. Indeed it is our largest creditor now. Other nations may also be persuaded to keep supporting our spending habits. But one has to wonder why our philosophical opponent (communist China) wants to invest so much. Are its motives pure? What if they're not? Is it a simple profit motive? What if it's something more?"

And as Thomas Friedman said in the New York Times:

"What does it mean when China's communist business environment is more inviting to U.S. companies, more conducive to their growth, than the United States? When the regulations and taxes in the U.S. make doing business in China attractive? The U.S. now ranks #40 out of forty industrialized nations in appeal to business."

As noted by Samuel P. Huntington and summarized by Richard K. Betts in Foreign Affairs:

"Huntington also presents data showing China as the only major power that has been more violent than Muslim states."

Columnist for The Atlantic (and 30-year expert living in Asia) James Fallows has argued that America can find ways to work with China so the 21st Century doesn't become a time of big-power conflict, but few if any experts believe that the U.S. can ultimately keep competing with China unless we make major improvements at home.

It's Coming

A big crisis is coming, and we need to prepare. I am an optimist, and I am convinced that the best years in America and the world are ahead of us.

I am also an idealist: I believe that we should clarify what we want for the world's future and get to work creating it--however difficult the task.

As a realist I am convinced that unless certain things change very quickly (and perhaps no matter what we do) we are facing some major challenges ahead. Every generation faces its share of problems and gets to choose whether to be beaten down by them or to turn them into opportunities.

All of this said, my optimism still wins out. Our best is yet to come. And it will almost surely come as we face and overcome the major challenges ahead.

What are these challenges? I have no crystal ball, and my only certainty is that they will surely come--and probably very soon.

Many nations have been at a point with conditions similar to those we now face, and there is a preponderance of historical evidence that certain kinds of problems dominate in such circumstances.

The cycles and patterns of history indicate four major types of challenges for our situation.

Four Possible Catastrophes

Four possible catastrophes are suggested by historical analysis. Of course, any foray into prediction is based on educated guesses, and the one sure bet is that the future will present a number of surprises.

Along with the inevitable shocks that will no doubt disturb all forecasts, one or more of these great challenges is likely to come again soon.

These scenarios are a good indication of what we should expect during the next decade:

1. Major Economic Problems

The Great Recession does not qualify as a major economic collapse, though nearly all the experts are convinced that it came very close to becoming one. An economic depression of considerably greater magnitude may be ahead.

2. Health Pandemic

Modern nations are extremely concerned about this terrifying possibility. It is a telling foreshadow that insurance companies are taking this threat very seriously and preparing accordingly. Historically, the Black Plague was as devastating as any war--more than most; indeed, it reportedly killed a third of the population in many parts of Europe.

3. An Unexpected Major Crisis

Examples might include a major volcanic event, earthquakes, meteors, drastic environmental shifts or other so-called "acts of God."

Of course, the unexpected can come at any point in the historical cycles, but in times like ours these randomly occurring disasters are especially devastating because coinciding with one or more of the other three challenges is so likely. In the age of WMDs, such catastrophes could be manmade--in all of history, there is no credible example of weapons being created and remaining unused.

4. Major War that Threatens the Homeland

The experts seem to think that few enemies in the world have the potential to challenge America in this way, but even if this is true the reality is that any of the other major crises would most likely be quickly followed by major warfare.

Things can change very quickly, as history has proven. We are at the point in history (following a major boom in the 90s and then 9/11, the longest war in U.S. history and the Great Recession crash) that we are weary of crisis.

We want the challenges to be over, and we are thus particularly vulnerable. It is at such points that the really big problems come--like Pearl Harbor after a roaring twenties boom ended by the stock market crash in 1929 and then twelve long years of crushing depression.

Turning Crisis to Opportunity

We've gotten a little soft after several generations of prosperity and entitlement. It's time for us to cheer up, man up and turn our coming challenges into opportunities.

America's biggest successes came in times of challenge: the Constitution came out of a time of war and economic downturn, slavery was ended in another era of war and economic depression, and the Greatest Generation stopped Hitler in a period of world war following the Great Depression.

The patterns of history suggest, and the intelligentsia from across the globe concur, that we are headed for another such time period; in fact, we may well be into it already.

The challenges won't be identical, of course, but they will likely be similar. Realism says our generation will have as many challenges as any other, and optimism says we can turn the coming challenges into remaking America and the world in the best and most important ways.

Whether we succumb to the challenges ahead or turn them into America's best years depends on the American people.

If we stand back and wait for our leaders to solve our problems, the crises ahead will almost certainly go very badly for America.

If we just pretend everything is fine (or that our leaders will fix everything without our help) until the crisis is fully upon us, we miss valuable preparation time.

If, on the other hand, we resurrect our identity as a nation of grassroots leaders, entrepreneurial thinkers and citizen-statesmen, we will use the coming difficulties to significantly improve the world we pass on to posterity.

Well, Chicken Little--it turns out that the sky is falling. Will we be prepared?

*If you think your friends and family should read these quotes, we urge you to forward this email to them. Also, please post the link, which you can find at the top of this page, on your social media profiles.

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Oliver DeMille is the founder and former president of George Wythe University, a co-founder of the Center for Social Leadership, and a co-creator of TJEd Online.

He is the author of A Thomas Jefferson Education: Teaching a Generation of Leaders for the 21st Century, The Coming Aristocracy: Education & the Future of Freedom, and FreedomShift: 3 Choices to Reclaim America's Destiny.

Oliver is dedicated to promoting freedom through leadership education. He and his wife Rachel are raising their eight children in Cedar City, Utah.