by Tom Purcell
Ah, New Year’s Eve. What a great night to revisit the past year.
Though I’d rather revisit 1999.
The unemployment rate was 4.2 percent in 1999.
Dot-com stocks were still creating lots of paper millionaires.
The U.S. deficit for that year was $1 billion — that’s right, “billion” with a “b,” a far cry from the $1 trillion to $2 trillion it is nowadays.
Things were going so well, we had to make up crises, such as Y2K, the Millennium Bug!
Because computerized devices used only two digits to record the date — “99” for “1999” — numerous glitches were expected to occur at exactly 12:01 a.m. on Jan. 1, 2000, when at least some of the devices would mistake “00” for “1900.”
Senators held press conferences to warn the public to prepare for the worst.
President Clinton told us to keep a lookout for terrorists, who might take advantage of the potential chaos.
Federal bureaucrats even appeared competent.
They established mobile command centers on the National Mall, where thousands of New Year’s Eve revelers would celebrate.
They directed police, firemen, FBI agents and CIA operatives to crawl around our nation’s capital to thwart anyone looking to pull any funny business.
They made detailed preparations — cots, blankets, bottled water, canned goods, shelter, portable lighting — to respond to any and every contingency.
But nothing happened.
When the clock struck midnight that New Year’s Eve, there were few glitches, no chaos and zero mass hysteria of any kind.
Y2K, wrote The Wall Street Journal, was, essentially, a giant hoax.
That was the downside of America then. We were at our best in preparing for crises that weren’t real.
We lived in a fiction of our own creation — fake wealth, fake security, fake spending promises at the local, state and federal levels that we’d never be able to afford.
Boy, would the realities of the next decade be a bear.
No sooner did 2000 begin than the dot-com bubble burst, wiping out trillions in paper wealth.
In 2001, terrorists would catch us with our pants down, striking us hard.
A worried Federal Reserve would begin a series of interest-rate cuts to pump “easy money” into the economy.
That easy money, combined with bad government policies to both create (Citizens Reinvestment Act) and buy (Fannie Mae and Freddie Mac) bundles of risky subprime home loans, would fuel a housing bubble.
The housing bubble would burst in 2008, wiping out trillions in wealth and kicking off the worst recession since the Great Depression.
Voters would kick Republicans out of office. Democrats, controlling the presidency and both houses of Congress, would make more fake promises we will never keep and would spend, by New Year’s Eve 2010, nearly $4 trillion more than we had.
The unemployment rate would be stuck at nearly 10 percent. State and local governments would begin to default on debt payments.
And all these woes would seem small compared to the $100 trillion in unfunded liabilities that generous politicians saddled our country with — liabilities we may never be able to pay for.
To be sure, our reckoning has finally arrived.
As bad as the past decade has been, the next decade will be plenty worse — unless we embrace the difficult, painful business of getting our house in order.
So while many in the media look back at the high points of the past year — while many neglect the sizable problems facing us — I will escape to a happier time.
This New Year’s Eve, I’m going to party like it’s 1999.