The indispensable Walter Russell Mead over at the American Interest has a perceptive essay on the changing politics of climate change.
I’d suggest pairing it with an article in the Telegraph about a new report by the International Monetary Fund called “Navigating the Fiscal Challenges Ahead” (h/t Powerline). If you’re marooned on a desert island this weekend with time on your hands, here’s the complete report.
Both the ordinary people and the markets have woken up to the fact that many of the world’s biggest economies have, courtesy of their politicians, dug themselves into a deep hole and the next few years will have to be spent on climbing out of it or face fiscal disaster. That means no money for saving the planet from a global-warming catastrophe that fewer and fewer people believe in anyway. Al Gore will just have to cry his eyes out in his new 10,000-square-foot house (with nine bathrooms) overlooking the Pacific.
As Edmund Conway, the economics editor of the Telegraph, explains,
the idea behind the [IMF] document is to set out how much different countries around the world need to cut their deficits by in the next few years, and the bottom line is it’s going to be big and hard (ie 8.7pc of GDP in deficit cuts around the world, which works out at, gulp, about $4 trillion).
But the really interesting stuff is the detail, and what leaps out again and again is how much of a hill the U.S. has to climb. Exhibit A is the fact that under the Obama administration’s current fiscal plans, the national debt in the U.S. (on a gross basis) will climb to above 100 percent of GDP by 2015 — a far steeper increase than almost any other country.
Not the least of the problems for the United States is that the average maturity of federal securities is only 4.4 years. In Britain it’s 12.8 years and in Greece, 7.4 years. That means that half of all federal securities will need to be rolled over by mid-2014. If the market begins to lose faith in the U.S., the interest rates demanded by the market will soar and debt service will begin to crowd out other federal expenses. The IMF calculates that the United States will have to cut its structural debt by 12 percent of GDP over the next ten years to get back on track. That’s higher than any other country (Greece: 9 percent) except Japan.
No wonder the voters are in an unforgiving mood.