This week we saw firsthand what uncontrolled deficit spending can do to a modern democratic nation, such as Greece.
For all intents and purposes, Greece is bankrupt except for the ~$150 billion bailout they are getting from the International Monetary Fund and the European Union that will keep them afloat.
In return for the funds, Greece has to adopt “austerity measures” that will limit jobs, programs, and social spending.
The result this week was social unrest, rioting in the streets, and civilians killed.
Other European nations with high deficits to GDP spending are at risk, such as Portugal, Spain, and Italy, as well as major Asian countries like Japan.
The uncertainty and fear of this chaotic situation struck the U.S. stock market hard—with the S&P falling almost 800 points this week, during a time of supposed economic recovery.
Last evening, I watched on the news as a professor from Columbia University debated with the newscaster about whether or not the U.S. was susceptible to the same type of debacle that we are witnessing overseas.
The newscaster took the position that our $13 trillion national deficit—much larger than Greece’s—certainly put us at similar risk, even though we have a much larger GDP.
The professor countered that we are not like Greece—we are different and that what is happening there cannot happen here in America.
The professor said that he thought that we are more innovative, more technologically savvy, and more able to grow our way—economically—out of this. He laughed at the prospect of America running into any sort of grave financial difficulty, because of “who we are.”
As someone who is focused on the importance of technological prowess, innovation, and progressive change to our economic health, competitiveness and national security, I fully appreciate the vital importance of these factors.
Yet at the same time, it seems to me to be stretching credulity to say that technology and innovation alone can save us from the consequences of fiscal unrestraint.
While I believe in our strong political, social, and economic foundation, I question whether we are truly so different from our neighbors overseas.
For IT leaders, the point is that just because we drive investments in new technology—“the art of the possible”—that does not make us invincible.
While technology can help us grow in amazing ways and potentially solve our most complex and challenging problems, it is not a mystical, magical elixir and cannot solve our deficit no matter how large it gets unchallenged.
It seems to me that our greatest challenge is arrogance.
As a nation, we can by proud of our ideology and many achievements, but we cannot rest on our laurels, thinking that we are immune to the consequences of our mistakes. We must accept that our spending will catch up with us, unless we course-correct.