Wednesday, June 22, 2011
Deficits and the New Detroit
When it comes to my household, I'm close to compulsive about not spending money that our family doesn't have. We have one credit card, which we pay off completely every single month. We buy our humble/practical vehicles with cash. The one debt we do have is our mortgage, which was a big stretch 10 years ago but now feels manageable. We live well, and want for nothing. But our "well" is always ever-so-slightly below our means.
This makes me feel completely out of sync with the trajectory of my nation. As Greece erupts in riots and strikes and outrage over austerity measures taken to try to shore it up financially, I can't help but see our national inability to confront our fiscal profligacy as precisely the same thing, writ large. Eventually, we're going to have to fall back to a sustainable position. It's inevitable. Inescapable. We can muck around with debt limits and putter around the edges of the problem to our heart's content, but the road we're on leads only one place.
And ultimately, when the debt hits the fan, the place it will hit hardest is my own home town. Washington DC, with its increasingly dense suburbs and its sprawling exurbs, is one of the few places in the country where home prices have remained stable or consistently risen over the past several difficult years. There's only one reason that I can see for this.
The money that we as a nation have borrowed to "jump start" our economy has tended to settle here in the Nation's Capital. Much of the money that we as a nation have borrowed to fund our wars has also landed here. If you want to be a global power, wealth will be drawn to the center of that power, even wealth that is only borrowed against our collective good credit. That's the way it's always been, and just 'cause we choose our "king" doesn't mean we get a pass from that hard truth.
Because of that wealth, the area is filled with civil servants, who aren't the faceless bureaucrats that demagogues like to attack, but tend to be..well..bright, civic-minded, and hard working. Our neighborhoods are also filled with military and Homeland security personnel and a vast array of DOD and other federal contractors. That financial base provides the foundation for a thriving local service economy.
If America does what it will need to do to get things back on track, then things here are going to get more difficult. Even if it's a sane balance, with cutbacks matched with a return to a pre-Dubya tax base and a focus on preserving our national commitment to care for the last and the least, the impact of right-sizing our budget will be felt here more intensely than anywhere else.
As I drive through the insane congestion and endless development in our over-busy region, I often find myself wondering what this will all look like twenty years from now. Will areas of post-austerity DC be like Flint or Detroit, with vast sections of exurban overdevelopment crumbling and in decay? Will the woodlands that were razed to build ticky-tacky-townhome communities and strip malls start pushing their way up through cracked parking lots and crumbled houses?
It's been strange watching the area grow so explosively since I moved here with my family in 1975. It may be stranger still watching it fade.