Economics is notoriously difficult to understand, even for top MBA students, and that, combined with a general public malaise when it comes to gaining a deep understanding of the issues facing our country, makes it difficult for average citizens to thoughtfully converse about the financial crisis that America is in right now.
But it's essential that we have an informed and engaged citizenship if we are to make progress. This video summarizes a report created by Mary Meeker, a partner a KPCB and former financial analyst at Morgan Stanley. It's a lengthy video, but provides a solid primer of the financial situation and outlook so that regular citizens can participate in the discussion in an informed way.
I think the video does a good job of defining the budget deficit and the history leading up to the situation we are in today. I'm a little concerned that the uninitiated might hear "cutting the deficit" to mean "cutting the services offered," since that is one of the two options for cutting the deficit and it is the one that uses the word "cut."
Like many Americans, I get nervous about the idea of cutting the services provided. After all, there are a lot of people who are depending on entitlements to get by right now. When the video talks about citizens "making sacrifices" so that we can get past our financial woes as a country, it's easy to interpret that as meaning "the most needy will just have to do without."
But I think that how we ought to read it is that families and communities will come together to fill in the gaps left by the cut to entitlements, since they just aren't working. It wasn't a bad idea to try having the government run these programs: theoretically the government should have been able to realize huge economies of scale.
The large entitlement programs have failed in another way as well: by taking the responsibility off of individuals to help those in their families and communities, they made it easier for people to separate themselves from the people in need. Distance like that makes it harder to identify with those less fortunate and realize that it could happen to you.
Every problem is an opportunity. Perhaps overcoming this economic crisis will do more than just avoid pinging the US's credit rating. This can be an opportunity to be a stronger, more compassionate society, if we choose to take it.