Every five years, there are national or financial crises that cause me to reinvent my company around newly created paradigms of business needs and direction. These shifts are all in the direction of killing off entrepreneurism, lowering standards and adding less value. Our financial model is based on money-in-motion and not creating value. By 2020, I believe that the decay in business morality and fiscal responsibility combined with the socialist agenda of our federal government will lead to the collapse of U.S. industrial and economic might and we will be broke and in chaos. Are we going broke? Yes, and we are becoming morally bankrupt at the same time.
-Reno-based management consultant Tom Taormina
During the 1990's the economic situation in New York City was so ‘No the world is not going broke.’ Of course, the housing boom right after the tech boom was a major player in ‘easy money,’ along with low interest rates that allowed middle America to spend like crazy. The cause is every person who wanted bigger and better -- be it cars, houses, or simply just cash from investments. Much like the easy cash from the tech boom and then the easy-cash housing boom, now we are in the easy-cash government boom. Until the ‘easy cash’ stops, we will not correct the problem, simply increase the intensity of the coming correction.
-Damien Melle, chief executive of West Coast Property Specialists in southern California
The world is not going broke, the world is already broke. In the U.S., consumers have spent more than they made and funded the difference with debt. Government has also spent more than they collected in taxes and funded the difference with debt. Debt cannot be paid with more debt for eternity and there are only two ways to get rid of debt. Either pay it off, or default on it. We cannot have a recovery unless the debt is removed from the system. Government can still borrow for the time being, but the U.S. is past the point of no return. Default or devaluation are the only ways out. Governments must make a hard choice between sovereign default and the bankruptcy of their middle classes through currency devaluation.
-Michael Bechara, a CPA and managing director of the Granite Consulting Group in Brewster, N.Y.
While the current economic situation is unlike anything I have experienced during 20 years in business, the world is not going broke. Governments have never been required to operate profitably, and have burdened themselves with financial obligations that could never be met within a normal business framework. During the 1990's the economic situation in New York City was so severe that consideration was being given to actually tearing down buildings in the Wall Street district simply to save the real estate tax obligations. Yet, given time and proper business models, planning and execution, the opposite occurred within a relatively short time period. The same will occur here, but there will be a permanent adjustment to the behavior of governments.
-Judah Lerer, who runs an accounting firm with offices in New York City, Dallas and Newport, R.I.
The world is not going broke. It's reallocating resources to cure excesses that have gone on for decades. What we're seeing is a global acknowledgement of the need to step in and provide assistance to remedy ills that exist with trading partners. Those that are stronger are likely, and should, extract premiums for doing so. Otherwise, they enable those less fiscally conscious among us to repeat poor behaviors.
-Dale Furtwengler, who runs an executive coaching firm in High Ridge, Mo.
Sometimes I really think the world is going broke. George Bush certainly helped the U.S. almost go broke with his poorly timed tax cut for the rich and one completely unnecessary war, and then the banking crisis. How surprised he was that deregulation resulted in a financial crisis! I believe in prudent regulation in all things, including SEC oversight of financial institutions as well as agencies to oversee oil drilling, clean air and clean water.
-Bettina Seidman, owner of a career counseling company in New York City
The world isn't going broke -- only the governments are. As we've seen around the world, politicians can't be trusted to adhere to a budget. They are motivated to spend today and let the next generation pay for it. We're looking at a future where we will see more frugality, self-reliance and lowered expectations. And it may surprise people how much healthier and happier they can be as a result.
-Michael Sick, owner of a San Diego company that makes body-surfing equipment
Yes, the world is going broke, but the process has been intentionally clouded by a system designed to do just that. National and international budgets are no different than personal and small business budgets. You must make or take in at least as much as you spend -- unless you have governmental compulsion at your disposal. The cause is the broadly held view among ‘citizens’ that compulsion can be employed efficiently, justly and morally. Nothing can be done to stop the present crisis except a broad and accurate understanding of what is going on and who the players are. Most people have not wanted to spend that much time and effort. The pain of the present crisis is causing a few people to wake up. Will it be enough? Who knows?
-Dick Cheatham, runs a speakers bureau in Richmond, VA
Small business owners from across the country weigh in. By Rob Reuteman (Erin Coyne contributed to this report.)