We all know the story of Easter Island (for the latest popular recitation of the story, see Jared Diamond’s COLLAPSE). The leaders sought to outdo each other by putting up giant stone statues of heads with stone hats. They kept doing this even when the building process was using up all the available forest for scaffolding and all the available labor for construction, until the island was denuded and no longer capable of supporting a complex society.
How crazy! Didn’t they realize they were exhausting their resources? Wasn’t it easy to see that all they had to do was stop building giant statues for a couple of decades to work on replanting and regenerating their lands? It wasn’t a huge society — surely they could have just looked around, seen what needed to be done, and decide to do the right thing. How hard was that?
Yet today we seem to have our own Easter Island leadership group in the Supercommittee in Congress. Republicans seem determined to keep putting up ever-larger rhetorical statues that say “No new taxes!” Democrats seem determined to keep putting up ever larger rhetorical statues that say “no cuts in social entitlement programs.”
We have a simple problem – the government does not take in enough revenue to meet the promises made under past governments with rosier expectations of growth and more pessimistic expectations regarding life expectancy. So we need to make some slight adjustments to prevent exhuasting our resources. We need to enforce a bit more saving (higher taxes so that we reduce consumption a bit and put that money toward meeting our promises to the sick and elderly), and we need to recognize that life expectancy has grown and economic growth has slowed, and that means we need to cut back a bit on promised benefits. We are talking about small adjustments here — maybe $35 billion per year more taxes and $95 billion per year less social entitlement spending for a start — in a $13 trillion economy. That is, adjustments of about 1% of GDP.
A small group of leaders is meeting to address this problem. They all know a change in direction is needed to stop us from exhausting our resources. They all know a change starts with a small step in the right direction. And yet they seem unable to reach an agreement to take even that first step. Instead, each side wants to keep up building their own big and bigger rhetorical statues (NO NEW TAXES! NO CUTS IN ENITLEMENTS!).
I guess now we can understand why Easter Island society perished — they must have elected a supercommittee of leaders to solve their problems. But this is the 21st century and the most advanced society in history. Can’t we do better?