The Spectre of Global Negative-Sum Conflict

U.S. Soldiers and Shoppers Hit the Wall
By ROGER COHEN
January 21, 2008
New York Times

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There are numerous economic storm clouds associated with the United States' extremely low savings rates and high levels of borrowing and consumption. If these and related trends produce a serious recession, then we are likely to see an increase in tensions across our society. Conflict is certain to accompany the shift from a positive-sum situation in which in which lots of people were getting richer to a negative-sum world in which the economic fortunes of lots of currently prosperous people will start to deteriorate. This will give rise to new kinds of conflict problems that were not now paired to deal with.

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Wars in Afghanistan and Iraq have pushed the U.S. armed forces to the limit. Many soldiers have scarcely seen their families in recent years. But a much larger American army, the one that's spent this century shopping, is even more overextended and its pain is now coming home to roost.

Nobody ever made money exhorting people to save. But U.S. banks and financial institutions have spent huge amounts in recent years telling people debt is good and savings are dumb.

Their ads - to the effect that "good daughters go into debt to take their mothers on vacation," as Elizabeth Warren, a Harvard law professor, put it - paid off handsomely as consumers went on a debt-financed shopping spree. Consumption has driven the U.S. economy; the only problem is consumers ran out of money years ago even as they did not run out of credit cards.

The rest of the article is available from the New York Times.