The United States has a problem: rapidly rising student debt. It also has a solution: online education. The primary reason for spiraling student debt is the soaring costs of a college education at a physical college. Online education strips away all of those expenses except for the cost of the professor’s time and experience. It sounds perfect, an alignment of technology, social need and limited resources. So why do so many people believe that it is a deeply flawed solution?

Because it means massive swaths of higher education is about to change. Technology has disrupted many industries; now it’s about to do the same to higher ed.

But it is the students who need aid, and not the financial kind. They have too much of that as it is. The amount of student debt is large and getting larger. It will top $1.1 trillion this year; two-thirds of college students will graduate with debt. The average debt burden is $27,000, though that is skewed higher by a small percentage who owe a lot more. Forty percent of students owe less than $10,000. The amount of student debt has doubled since 2007, tripled since 2004, and many economists believe that the effect on the overall economy is negative.

While college graduates undoubtedly land in higher-paid jobs (earning almost twice those with only high school degrees), that may be offset by the burden of interest payments on student loans. Says Diane Swonk of Mesirow Financial: “Student debt has a dramatic impact on the ability to buy a house, and to buy the dishwashers and the lawnmowers and all the other purchases that stem from that … It has a ripple effect throughout the economy.”

As for the students, the price of the debt is often not worth the benefits. According to economists at the Federal Reserve Bank of New York, 17 percent of students are in default, compared with 10 percent in 2004. And a large portion of those defaulting are over 30 years old, which means that the problems with student debt don’t disappear with age.

Some debt is clearly manageable, rational and reasonable. Taking on a modest amount of debt for a degree that dramatically enhances your earnings power makes eminent sense. Yes, interest rates on federal student loans are too high relative to mortgage and market rates, and they are set to go higher this year, possibly to nearly 7 percent. But the problem with student debt is not that it has gotten so large so fast; it’s the extent to which a college degree has become so expensive for so many who cannot afford it, yet leaves so many with a credential that is excessively costly relative to the skills it offers.

Colleges, including commuter community colleges, cost money to run and build, and they cost ever more as even third- and fourth-tier institutions try to entice students. Most students earn a degree because the credential is required for almost all higher-paying jobs. If the cost is between $25,000 and $75,000, and more than $200,000 at elite schools, then that is the price that must be born.

But is it? That is where the burgeoning world of massively online education presents such an opportunity. Institutions like the University of Phoenix have been offering online courses since the 1990s, but this new wave is larger in scale and now includes traditional universities. Online courses cost a fraction of a brick-and-mortar education. New companies such as Udacity and Coursera have been experimenting with new models, ranging from per fee, limited-enrollment classes with select professors to the so-called MOOCs (“massive, open, online classes”) that attract tens of thousands of students per class. Coursera, barely a year old, already has 3.5 million registered users. Students anywhere in the country and indeed the world can sign up, take a course with skilled professors, meet with other students in their area for study groups and learn the material. Even more crucial, they assemble a menu of courses that combine pure learning and more-tailored vocational studies based on skills needed for particular jobs. And all for a fraction of the costs.

The problem is that many in the business of higher education hate the idea. It’s disruptive to the traditional model and profoundly threatening to the current economics of the academic industry. The elite schools have embraced the online world because it allows them to use the power of their brand to extend everywhere. But many community colleges find the prospect more challenging, as it could well undermine their mission and the need for them. One critic quoted in a recent New Yorker article described what might happen:

Imagine you’re at South Dakota State and they’re cash-strapped, and they say, ‘Oh! There are these Harvard courses. We’ll hire an adjunct for three thousand dollars a semester, and we’ll have the students watch this TV show.’ Their faculty is going to dwindle very quickly. Eventually, that dwindling is going to make it to larger and less poverty-stricken universities and colleges.

Unquestionably, the next wave of online education will disrupt. It will threaten faculty and colleges, but it will empower students. Yes, we are a few years away from online courses providing degrees and credentials that will be seen by the marketplace as adequate. For now, taking courses online may enrich your life, but it will not provide the entrée into jobs requiring a degree, whether associate’s or bachelor’s. Many fields of graduate study will be untouched, but many others – law, accounting and others – are ripe for online credentializing.

Having spent almost a decade as a graduate student and professor, I was always struck by how resistant to change and questioning academic cabals could be. The growth of online education is yet another example. Many are embracing it, and many are resisting it because it represents change to a world that often moves at the pace of medieval guilds.

The beneficiaries, however, are students, which really means all of us. The costs of obtaining needed credentials will plummet, and the ability to create more tailored, vocational programs aligned with the skills employers need will increase exponentially. That will likely lead to some shrinkage in the number of physical institutions offering degrees, but an increase in the number of people obtaining them. It will also mean that those taking on debt – especially at elite schools – will be those most likely to be able to bear those debts, while those who need more specific and vocational education for decently paid but not high-paying jobs will not be saddled with loans out of proportion to their earning potential.

This online educational revolution is the next wave, and it is still very early. Rarely has a societal problem been presented with such an ideal solution. We should embrace it passionately, because it’s happening whether we do or not.

PHOTO: REUTERS/Jason Reed

On Monday, by a comfortable 69-27 majority, the U.S. Senate passed a controversial bill that will require online retailers with annual sales of more than $1 million to collect state sales taxes. Said Republican Mike Enzi of Wyoming: “This bill is about fairness. It’s about leveling the playing field between the brick-and-mortar and online companies, and it’s about collecting a tax that’s already due. It’s not about raising taxes.”

Wait, isn’t it? Leaving aside the anomaly in today’s world of a Republican sponsoring a bill that raises revenue, the proposed law is entirely about raising taxes. The question, then, is whether these are taxes that ought to be raised, and if this is the way to raise them.

The short answers: yes to the first, no to the second. This bill is precisely the wrong way to raise revenue from a growing stream of business. It applies a tax designed for physical entities to new commerce and does so in ways that will do little to help states or to reinvigorate small businesses that are hurting.

As is, much of the tax system is not fair. We are acutely aware of the labyrinthine quality of the U.S. tax code. The vagaries of state-by-state sales taxes only add to the complication. Five states don’t even have a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon), and seven states have no income tax, including no tax on dividends and interest (Alaska, Florida, Nevada, South Dakota, Texas, Wyoming and Washington). If fairness is your litmus, as it is Enzi’s, then it is rather unfair to live in New Jersey as opposed to, say, Florida, given the radically higher tax burden.

That much of the code is currently unfair is hardly an argument against making one aspect of it fairer. But the online sales tax bill will place added burdens on those already paying more, whereas those living in sales-tax-free states will continue to feel none. For years, those of us who live in states that levy a sales tax have enjoyed the free pass that comes with shopping tax-free on Amazon, eBay, and any number of online sites. We get to sit at our computers at 1 in the morning and order those much needed gyroscope-equipped power drills without the nuisance of that extra 6 percent tacked on by state legislators whom we’ve never heard of, didn’t vote for and aren’t entirely convinced actually exist.

The bill was created because of angst from retailers and state legislators. Retailers have long cried foul, claiming that the ability of online sites to sell the same goods without sales tax provides unfair advantages that drive brick-and-mortar stores out of business. Many small businesses with storefronts that rely on local customers have actively lobbied for an online sales tax, asserting that unless that playing field is leveled, more small retailers will go out of business, eliminating jobs and harming local communities. Cash-strapped state governments have been even more adamant, arguing that they are losing more than $23 billion a year in foregone revenue because of the loophole, with negative consequences for teachers, police officers and all residents.

Even here, however, the problem isn’t so simple. Some small business owners have warned that the burden of record keeping for their online sales by state will be immense. The bill has a proviso that each state develop software that will ease that burden, but there’s hardly a guarantee that these systems will be harmonious, leaving a small business with $1 million in online sales to confront 44 different software widgets and a whole new IT budget. Given the competitive landscape of retail, the bill is likely to harm those who supposedly need it the most: small businesses.

While the bulk of commerce still takes place at brick-and-mortar stores, only e-commerce is seeing rapid growth. And while some of that is cannibalizing physical stores, e-commerce is creating new markets, which has been as much the savior of small, innovative businesses as a disruptor. Smart boutique owners know how to add an online component, which works in tandem with their physical store and often becomes an even larger entity.

Then there are state governments, many of which need all the cash they can get to cover pension plans that are seriously underfunded. The allure of “lost” online revenue is understandable, but states would be better served by encouraging online commerce, especially if they are determined to tax it. That is where the growth is. If you want vibrant communities, you have to support the virtual ones.

Nonetheless, governments require revenue. Over the past years, there have been various calls for a value-added tax in the United States; the explosive growth of online commerce should renew that debate. The VAT is well suited to online commerce because it creates a chain of revenue that goes from vendors to wholesalers to final customers. Of course, a VAT would be inherently disruptive of state-sales taxes and would require radical changes at the state and national levels. We appear nowhere near that.

After sailing through the Senate, it appears that the bill’s final passage in the House of Representatives is uncertain and perhaps unlikely. House Speaker John Boehner is in no hurry to bring the bill to a vote, and while we know that his views hardly determine the behavior of the Republican caucus, in this case it is certainly more in sync. There is predictable, if knee-jerk, opposition from those Republicans committed to no new taxes, and there is intense lobbying from powerful online players such as eBay to slow passage or further amend the bill.

This proposed bill is a bad implementation of a needed change. It’s a reminder that what we can currently do politically is far short of optimal. In this case, it fails to even be acceptable. It raises a small amount of revenue and generates a large amount of friction. It does, however, highlight that not all areas of our economy are bleak and moribund. It’s the very vibrancy of the e-commerce world, both independent of and connected to physical stores, that led to this legislation. Remember the thief who was asked why he robbed the bank and answered, “Because that’s where the money is”? Well, that’s why we have this new bill, because e-commerce is thriving. The bill may be a poor idea, but at least there’s a sector of our economy that is doing so well.

PHOTO: A worker loads a shipment of outgoing boxes at the Amazon.com warehouse facility in New Castle, Delaware, November 24, 2006. REUTERS/Tim Shaffer

The consensus among investors and the financial media is that the quarter was something of a bust, as company after company reported only modest – and in many cases, non-existent – revenue growth. “Revenue still missing as companies beat earnings,” blared a USA Today headline, and that encapsulates what most have said.

The uber-bearish economist Gary Schilling, cited by the widely-read uber-gloomy blog Zero Hedge, put it bluntly: “Pricing power has been non-existent [and] sales volume increases have been very limited so the only route to profit has been cutting costs. That has pushed profit margins to all-time highs.” Enjoy it now, says Schilling, because profit without revenue growth is “unsustainable.” The only reason markets are doing well and corporations aren’t panicking, the thinking goes, is because central banks are flooding the world with money.

At the same time, large companies have proven adept at generating substantial earnings. That is true now, and it has been true for years. Since 2009, for instance, the mega-companies of the Standard and Poor’s  500-stock index have doubled their profits. Companies overall haven’t done quite as well because small companies don’t have the same advantages, such as keeping income offshore, assorted tax breaks and pure economies of scale. Even so, according to the Bureau of Economic Analysis, U.S. corporations overall have seen their profits grow more than 50 percent during these years.

But now, while larger companies are still showing earnings growth, revenues have been almost at a standstill. This trend is widely seen as proof that trouble is brewing. Companies, especially publicly traded ones, face relentless pressure to generate earning growth at all costs. With slower revenue growth, the only way they can do that is to cut costs and do whatever they can to become more efficient, from greater use of technology (and therefore fewer workers) to cutting wages and benefits, either by finding cheaper labor abroad or by cutting benefits and wages domestically. In a world of slow revenue growth, that becomes harder. Says Jeffery Kleintop, chief market strategist of the financial firm LPL, companies are going to have a hard time eliminating enough expenses to hit earnings targets. “When there’s no more fat to cut,” he says, “you start to cut muscle, and then you’re cutting bone.”

The problem with these views is they rest on the belief that companies are revenue-challenged. That may be true for some companies over the past few quarters. But it simply isn’t true overall.

Since 2009, while the global economy has grown less than 4 percent per year, on average, companies have generated revenue growth at almost twice that rate. As for companies engaged in the more dynamic areas of our economic lives ‑ technology companies, innovative retail companies, industrial companies ‑ those have grown at an even faster clip. What’s more, the average rate of growth is weighed down by financial companies‑ though overall that is a good thing, given how bloated and outsize the financial industry had become before 2009.

More important, while some companies are finding it hard to generate growth, over the past four years the sectors we would want to shrink are shrinking while the sectors that stand to materially improve our lives have been booming. Financial services, some healthcare companies, coal and oil producers – those are the industries that have been challenged. The shrinkage of these sectors is a good thing; you don’t want healthcare costs eating up larger portions of national income (which remains a problem); you don’t want energy costs crowding out other consumer spending; and you don’t want a bloated financial services sector. Meanwhile, Google, Amazon, eBay, Apple, Honeywell, United Technologies, Netflix, Target and on and on ‑ those have thrived. And they’re not thriving at the expense of society, whatever the rhetoric about inequality would suggest.

Yes, there is massive inequality, and average wages have stagnated in the United States and decreased in much of the developed world. But that is the average. Within that, wages for the college-educated, for the skilled and for residents of dynamic urban areas have been growing rapidly and robustly. Google would not be generating almost $60 billion in revenue this year unless millions of businesses large and small were using banner ads and search to expand their businesses, and they can only spend that money because their businesses are, in fact, expanding. EBay is growing at double-digit rates because PayPal is booming, and it wouldn’t be booming without those millions of consumers using it for payments.

How we view corporate earnings is being distorted through various negative lenses. One lens says macroeconomic growth defined by GDP is slow and getting slower and companies are about to slow down far more than we think. Another lens says the relative success of companies is coming at the expense of substantial swaths of society. Neither lens allows for the fact that companies are doing well because vast swaths of the globe are booming, including substantial numbers of people not just in China and the emerging world but also in the United States. That boom isn’t just a function of creative accounting and cost cutting. It’s because so many are doing quite well in the world today even as many people struggle mightily.

The economies of today are simultaneously serving the needs of more people than ever while failing to provide sufficiently for vast numbers of people. That explains why so many companies are succeeding so spectacularly, and why that trend is likely to continue for quite some time. They thrive because many are thriving, and because they bear few of the burdens of states that must provide for those who are not thriving. Healing that split is one of the challenges of our day. Thankfully, the thriving companies are the ones are most likely to be part of those solutions.

PHOTO: A member of the Occupy Wall Street movement, Emma Wolfson, waves a flag in protest of corporate profits in Zuccotti Park near the financial district of New York October 12, 2011. REUTERS/Lucas Jackson 

Events unfolded rapidly in Boston this week, from the bombing on Monday to release of photos of the suspects on Thursday to the citywide manhunt for one brother and the killing of the other. While we now know that the two young men are ethnic Chechens who spent time in Kyrgyzstan, we know nothing as yet about why they did what they did.

But perhaps less important than whatever their rationale turns out to have been is how the United States is reacting to the events of this week. On that score, the initial reactions here suggest that we may have turned a post-9/11 corner, still shocked, still pained, but no longer so fearful, so ready to blame religious zealots, and so willing to discard the freedoms that give us such strengths and yet can, at times, leave us so vulnerable.

There will always be people who find some reason to wreak havoc and inflict pain. Yes, such attacks can kill and maim, and thankfully, the Boston Marathon bombing, horrible though it was, did only limited physical harm considering the number of runners and the size of the crowds. It’s what comes after that shapes our lives even more. It’s how society reacts that affects not the hundreds directly harmed and the three killed, not the thousands of friends and loved ones, but the millions and hundreds of millions who were touched only through their sympathy.

The United States has had only limited experience with these attacks, whether foreign or domestic. While the Newtown massacre was a reminder that America is no stranger to homegrown gun violence, bombs designed to shock as well as kill are rarer. In fact, only in the past 50 years has American society slowly adjusted to the types of theatrical violence that the Boston bombing represented.

In the late 1960s and early 1970s, repeated Cuban hijackings of U.S. planes led to the first installments of security layers at airports, including metal detectors. In 1993, the World Trade Center was shaken by a bomb detonated in one of its parking garages, killing six and wounding 1,000.*  In 1995, the Murrah office building in Oklahoma City was blown up, killing 168. And the September 11th death tally was nearly 3,000.

Each of these episodes changed daily life for everyone, and none more so than 9/11. From intensive security in many office buildings to much more intensive screening at airports, from a vastly expanded surveillance network of electronic communications to cameras in urban areas (which have allowed the Boston authorities to identify those suspects), our lives have been changed. The response to the hijackings of the 1970s seems almost quaint by today’s standards: metal detectors. Then, after several international episodes of bombs bringing planes down, authorities demanded that luggage be scanned. Still, while flying before 2001 was a hassle, it was not a security gantlet punctuated by fear.

The American response to 9/11 was both brutally effective in targeting those who did it – al-Qaeda and its state-sponsors, the Taliban – and ham-handed. Today, we feel its effects most when we travel, and the contrast between traveling from U.S. airports and other airports is visceral. Other countries have adopted similar screening techniques, but airports in Spain and Indonesia (both of which I flew out of recently) don’t exude the same degree of tension. In New Zealand, domestic flights are still like America of the 1970s.

That screening may be a small price to pay, but the widespread suspicion of Muslims has been a greater harm, as has the culture of classification and secrecy that grew rapidly in Washington just as the national security state did in the face of the Cold War.

The initial leap of some news outlets to Muslim-bait was also quashed, as the appetite for such easy blame appears to be fading. As it turns out, the two brothers are Muslim, but not Arab, not Iranian, and not affiliated with any known organized group. That says no more about Islam than Cuban hijackings in the 1970s said something about Catholicism, or than Timothy McVeigh and his Oklahoma madness said anything about Protestants.*

In the reaction to the Boston bombings, we are seeing, at least for now, an outburst of balanced outrage. I lived in Boston for seven years in the 1990s. It was a tough place — not threatening, just tough. Removed from the years of busing that had brought out the us-versus-them worst, it wasn’t yet as gentrified and reborn after the multibillion-dollar Big Dig. The DNA of cities takes a while to change, and you could feel in the many reactions from Bostonians that they were hurt, angry, and determined to catch whoever did it. But they were equally determined to keep going without making too many compromises about their lives. The city was shut down on Friday to make it easier for law enforcement to do their job, but for a very specific reason, not some generalized fear.

It’s been said for years that we have ample tools via law enforcement agencies to guard against attacks and pursue those who undertake them. The Boston response is classic law enforcement, with the FBI leading the way, the police doing the vital work, and untold numbers of volunteers and responders adding to the mix.

Terror is not an act per se; it’s the creation of fear via an act. It’s been said that Russia is relatively immune to terror, even after a number of gruesome and far more lethal episodes in recent years. In 2004, a school in Beslan was seized by Chechen fighters. When Russian troops stormed the school, nearly 400 people died. Yet that had little discernible impact on Russian attitudes or behavior. Russians are largely impervious to the effects of terror attacks because they don’t expect perfect security. They expect a world fraught with peril, and probably too much, though their history suggests that peril is the norm. Hence random acts of terror don’t terrorize.

Yet England, Spain, France and Israel have also been subject to domestic attacks, Israel especially, and they have managed to thread a path between changing their chosen way of life and increasing their vigilance. The Israelis have defied the worst of domestic attacks by refusing to stop living the way they wish. If a café was bombed, there was urgency to reopen quickly and collect contributions from patrons for a guard. Paris, London and Madrid all have had subway and train bombings in the past 20 years, but these have not lead to massive external changes in how their vital hubs were used daily. Instead, they led to far more camera surveillance and occasional police presence, much has been the case in New York City this past decade.

It’s too soon to say with certainty that the collective response to Boston indicates both a more mature and more effective phase in how we deal with danger. Yes, there will be changes to the marathon next year, in Boston, and then also in New York, London and wherever races are held. It may be harder to get near the finish line, but the danger won’t disappear. Someone can always find a way if what they want is to kill and maim. What can change is how much these acts matter to us, and how much strength we exude, not by reshaping our lives to prevent them but by defying them — by changing our lives so little.

*CORRECTION: This column originally misstated the year when the World Trade Center bombing took place. It also misstated Timothy McVeigh’s first name.

PHOTO: Police officers take position during a search for the Boston Marathon bombing suspects in Watertown, Massachusetts April 19, 2013. REUTERS/Brian Snyder

How about the war on drugs? Said one recent analysis: “We’re losing the war on drugs because it’s a war that defies the laws of economics. We might as well be fighting a war on gravity.”

And how about what history can tell us about our current policies? Said one recent review of Amity Shlaes’ biography of Calvin Coolidge, which makes the case for Coolidge as an exemplar of responsible economic policy:  “Our current political leadership ‑ and we who elect them ‑ are spending the country into ruin. The laws of man can be bent and broken; the laws of economics can not.”

This is just a smattering of examples over the past few weeks. Increasingly, our debates about – and our solutions to – pressing issues such as immigration, budgets and debt are framed in the context of all-powerful economic laws that dictate what is and is not possible. There’s just one slight problem: There are no laws of economics.

For sure, many economists and large parts of society believe there are. The high levels of anxiety about deficits and government debt, not just in the United States but throughout the euro zone and much of the world, stem from the belief that if central banks create too much money, it will inevitably lead to inflation. Why? Because the “laws of economics” say the supply of money will cause inflation if overall output stays the same. In the developed world, clearly, there has been an increase in money supply via the Federal Reserve, the Japanese Central Bank and to a lesser extent the European Central Bank, yet growth is minimal everywhere. While there is no statistically discernible inflation as of yet, the “laws” strongly indicate that there soon will be.

Unless, of course, those laws are wrong or simply not “laws.”. Some, such as Paul Krugman or other equally strong (but less vociferous) believers in the precepts of John Meynard Keynes would say inflation isn’t increasing because that’s what happens in recessions. When demand is depressed, more money only closes that gap between demand and supply. That, too, depends on a basic “laws of economics,” that of supply and demand, which is one of the first precepts students of economics learn and one of the most widely disseminated – if often misunderstood – principles of economics.

Yet even here, the idea that these are ironclad laws breaks down. So much of economics depends on the theory that we are all “rational actors.” Yet as behavioral economists such as Daniel Kahneman have shown, we are rarely rational actors. Patterns of individual behavior are very different from what economic laws assume. People sell when prices are falling, and buy when prices are rising, even though their interests would be served by doing the opposite.

Institutions and states are not much different; they make decisions all the time that do not “maximize their utility.” To put it more plainly, they often make decisions based on fear and hope rather than on a rational calculus of what will best serve their interests over the long run. Governments cut spending when they should increase it (austerity in difficult times) and expand spending when they should cut it. Companies often don’t invest when they are unclear about the future and business is soft, which is precisely when they should be investing if the goal is to maximize long-term profitability and viability.

The notion that economics is a science with irrefutable laws appeals to economists (who have long tried to elevate the profession out of the realm of observation and description and into the realm of science) and to the widespread human desire for certainty. But even science isn’t quite so set, as any good scientist knows. The laws of gravity may be set, until the laws of quantum mechanics throw a wrench. Our ability to measure the world increases, and our understanding of laws evolves.

Economics is based on a limited amount of information compiled over the past hundred or so years. We have no way of knowing with any exactitude the gross domestic product of imperial Rome, of Spain in its 16^th century golden age or of the United States in 1820s. We can try to fill in the blanks retrospectively, but that’s all. We don’t know because those numbers didn’t exist. All these economic laws are based on what a few cogent thinkers such as Adam Smith and David Ricardo observed at the end of the 18^th century and what a new set of 20^th century statistics (GDP, unemployment, inflation) suggest.

In short, even if there are laws of economics, we haven’t been observing them for long enough to know what they actually are. And given the vagaries of human behavior and the mercurial nature of states, people and institutions, the notion that there’s some grand mechanistic, master system that explains all and predicts everything is at best a comforting fiction and at worst a straitjacket that precludes creativity, forestalls innovation and destroys dynamism.

Referencing “the laws of economics” as a way to refute arguments or criticize ideas has the patina of clarity and certainty. The reality is that referencing such laws is simply another way to justify beliefs and inclinations. I may agree that the war on drugs is flawed, but not because it violates “laws of economics” but rather because it fails in most of its basic goals. The test of whether government spending or central bank easing is good policy should be whether they succeed in ameliorating the problems of stagnant growth and high unemployment, not on what the “laws of economics” erroneously say about certain future outcomes.

Liberating ourselves from the fictional cage of these laws will not suddenly reveal hidden answers. But it will allow for more pragmatic examination of what is working and what is failing and why. Economic theories are guides, ones that have substantial utility. But once elevated to the realm of laws, they fall short and do us no good.

PHOTO: Adam Smith etching in the public domain. 

In a long essay in the New York Times drawn from his lengthy and just-published book The Great Deformation, Stockman this week made an impassioned plea for Americans to wake up to the looming crisis just ahead. This crisis, he predicts, will be triggered by a stock market collapse that will remove any lingering illusion that we are OK: “When it bursts, there will be no new round of bailouts like the ones the banks got in 2008. Instead, America will descend into an era of zero-sum austerity and virulent political conflict, extinguishing even today’s feeble remnants of economic growth.”

Stockman has many proposed solutions ‑ abolish Medicare, means-test Social Security ‑ but little hope of any change. The system is broken, the die is cast, sell, sell, sell, sit with cash in your mattress and hope we can make it through the reckoning.

Usually, such crib notes of an argument do it injustice. But the above is not a caricature of what Stockman predicts. It’s what he believes to be the imminent fate of America. He is an unusually erudite and eloquent voice, but his message is so stark that it’s almost impossible to violate by reducing it to its bare minimum.

It’s remarkable how much play these views get and how much traction they have. The tradition of jeremiads extends back to the dawn of recorded history; the biblical The prophet Jeremiah railed against the flaws and failings of the Israelites, and though he was ridiculed for delivering an unheeded message, in the fullness of time his words came back to haunt his people. American society is infused with that tradition. Just read the sermons of any number of 17^th century New England pastors who decried the immorality and sloth of their congregations, or various Great Awakenings that called people to return to the right way or risk God’s wrath and misery.

Today’s jeremiads are decidedly more secular – though you can still hear religious ones in churches and temples scattered through the land. But the ones that grab the public’s imagination are now economic rather than religious, warning of collapse unless we all wake from our stupor of greed and debt-infused denial. Stockman is the voice du jour, but he joins a chorus. The financial world hears frequently from Marc Faber, known affectionately as “Dr. Doom” for his frequent prognostications of bad times ahead. On CNBC yesterday, he pronounced that soon every country will be Cyprus, with insolvent banks and governments raiding deposits. “It will happen everywhere in the world, in Western democracies,” Faber said. “You have more people that vote for a living than work for a living. I think you have to be prepared to lose 20 to 30 percent. I think you’re lucky if you don’t lose your life.”

And there are others, of course. Ever since the financial implosion of 2008, Nouriel Roubini has been traversing the lecture and consulting circuit with his dour analysis of the global financial system and its multiple flaws. Jim Rogers, who once worked with George Soros and famously rode his motorcycle across the globe, sits in Singapore and rails against the foolishness of central bankers and lemming-like investors while predicting China’s inevitable rise and global supremacy. Meanwhile, Stockman-like strains of end-of-days debt-laden pessimism infuse the Tea Party and work their way into the Washington mainstream.

All these voices follow the first law of doomsday predictions: Don’t give a date. Yes, Stockman has said his script will play out “in a few years,” but that is both sufficiently vague and sufficiently soon to sound simultaneously alarming and be effectively impossible to argue against. As long as you don’t give a specific time when the world will end, the system implode, the markets crash, you can always – and in today’s pessimistic culture, credibly – say it might not have happened yet but it will soon. At a time when fear is at a premium, those arguments stick. Stockman is getting reams of attention (including this column …). But someone who predicts that the future will witness a technology-infused solution to many of our current concerns? Not so much.

And that is the most salient issue. We are so immersed in our moment of anxiety that we take such extreme warnings very seriously. We listen to other, less dire perspectives more skeptically. That is almost exactly the obverse of the climate in the 1990s or the 1950s. Few now remember Fortune magazine issuing a book in 1956 called The Fabulous Future in which presidential candidate Adlai Stevenson spoke of “the most extraordinary growth any nation or civilization has ever experienced,” labor leader George Meany predicted “ever-rising” living standards and media executive David Sarnoff gushed, “There is no element of material progress we know today that will not seem from the vantage point of 1980 a fumbling prelude.”

In 1999 the chief executive officer of search engine AskJeeves declared to me in an interview that he wanted to give people “perfect information” in order to liberate and empower everyone to create a brave new world. You could throw a dart at a large pile of magazine, books and commentary in either decade and find effusive views about the limitless future, and those voices were seen as credible, compelling and newsworthy. Today, such views would gain little traction, let alone respect.

These oscillations themselves obscure the simple truth that our views about the future usually says less about what will happen then than about how we feel now. As the saying goes, predictions are tricky, especially about the future. None of us know what will unfold, and the human legacy of accurately gauging what will happen is poor at best.

Of course, Stockman might be right, and the jeremiads can be useful if they force us to focus on issues we are otherwise ignoring. Surely, political and economic policy can use constant improvement. But as for the odds of him being right, the past is suggestive if not predictive: The end of the world, the collapse of an old regime, the implosion of order ‑ those are rare, rare, rare. Even the crisis of 2008, as damaging as it was, did not fundamentally change the world as we know it, however much it raised the fear of the end. Current warnings of the end need to be placed in the context of a remarkably stable time, if not an easy one. Stockman and the rest of the doomsday chorus have not revealed any hidden truths; they simply loudly voice concerns widely shared. As such, they are a voice of collective angst, just as surely as the utopians of years past were beacons of collective hope. We should listen to the warnings, but given how paralyzing fear can be, let’s not invest them with crystal-ball clarity and so make them more real than they are.

PHOTO: Still from video of David Stockman at Thomson Reuters Newsmaker event, New York City, April 1, 2013.

While tiny Cyprus teeters on the brink, dominating much of the news, and elusive peace in the Middle East remains in the headlines, there is another battle going on — the latest in a long war that is shaping our planet far more than the events in Nicosia or the West Bank. Food and water are essential to human existence, yet in the last few decades the ability to increase food supply by technological means has stirred fear and passion. Cyprus’ woes may come and go; the food wars are going nowhere.

Whole Foods and Trader Joe’s just announced they would not sell a soon-to-be-approved genetically modified salmon called AquAdvantage. That follows Whole Foods’ recent announcement that it would require all items sold in its stores to include information on “genetically modified organisms” by 2018. Popularly known as GMOs, these are foods whose genetic code has been scientifically altered. The recent steps are just the latest salvo, and follow a failed ballot initiative in California last fall that would have mandated all GMO foods to be clearly labeled.

These measures were presented as part of ongoing efforts to allow consumers to make more informed choices about their foods, but they also take a clear moral stance against GMOs. In announcing the salmon ban, a Whole Foods spokesperson stated: “We believe all farmed animals — whether raised on land or in water, should be from breeding programs designed to promote their welfare rather than developed solely on production or economic outcomes.” A number of Whole Foods shoppers were already outraged that the chain has been selling products containing GMOs, particularly corn produced from Monsanto’s Roundup Ready genetically modified seeds. One advocate labeled Whole Foods “Wholesanto,” claiming that it only agreed to labeling after too many customers threatened to boycott the store. There was also reference to the policies in the United Kingdom and much of the European Union, where public attitudes towards GMOs are overwhelmingly negative.

Why be so concerned? On the plus side, GMOs may solve a key problem and enable global growth. They may solve the Malthusian conundrum, and prevent what people have been fearing for centuries — namely that the earth cannot support more than a certain number of humans consuming what they consume. Still, GMOs are widely distrusted, even hated.

The animus toward GMOs is widely shared, and yet, the prevalence of GMOs has been part of the massive increase in agricultural production over the last few decades. Yes, that point in not without controversy. Critics of the biotechnological advancements in agriculture claim that decades of use have not increased yields and instead have weakened the organic food chain, eliminated crop varieties and actually decreased the resilience of the food chain worldwide by reducing natural diversity.

Still, it’s undeniable that as the population has exploded in the last hundred years, so has our food supply. That is especially true in the last 20 years, which have seen the sharpest rise in acres planted with genetically-modified seeds. In 1992, there were about 5 billion on the planet; today that number is in excess of 7 billion and climbing. Yet far from there being food shortages, much of the world is in surplus. Not everyone has enough food, but it’s not for lack of supply, but because of distribution. Potable water is a far greater issue.

Over the last two decades, crop yields have increased significantly in countries that have high levels of biotech crops. In the United States, close to 90 percent of corn and soybeans are genetically modified, with seeds made by Monsanto leading the way. Since 1992, yields have climbed as much as 75 percent. Similar effects have been seen throughout the world, from Brazil to Russia to South Africa.

It’s true that agricultural productivity has been growing steadily in the past century, even before biotechnology produced seeds. And many of today’s GMO seeds don’t themselves increase yields; they are designed to reduce the need for pesticides. Proponents say that using fewer pesticides is not only good for health, it is good for the planet. In addition, some of the next generation of GMO seeds are being designed to deal with the pressing issue in the years ahead: climate changes and more drought. Drought-resistant seeds may be the key to avoiding large-scale famine as the global population grows and arable land shrinks. It’s either that, or people getting by on less food.

Better to go with the former. And yet consumers seem to be struggling with the choice. Part of the mistrust around GMOs stems from the companies that make them – Monsanto, Dupont, Syngenta – companies that have not always engendered the support of farmers. Monsanto in particular, having produced the toxic deforestation chemical Agent Orange during the Vietnam War and taken a strong hand with price fixing for small farmers has been vilified as the worst of corporate greed and indifference. Though Monsanto’s culture has changed dramatically in recent years, these images take a long time to fade, and as its recent Supreme Court case against a farmer who tried to copy its seeds demonstrates, it still has an adversary relationship with its customers.

There’s also the familiar fear of technology that has run through Western society for centuries. Fear of the printing press, fear of the telephone, the television, and the Internet as destabilizing forces is on the same spectrum as fear of biotechnology.  Playing with the DNA of what we eat raises specters of “Frankenfoods” and humans rolling the dice with nature’s code, with unpredictable and destructive results. Though humans have been manipulating the genetics of animals and crops since at least the early 19th century (when Silesian monk Gregor Mendel began experimenting with green seeds and yellow seeds), the fear that we are messing with an equilibrium has never been far from the surface.

With GMOs, we are faced with a greater-good question: Should we use all means available to allow billions of new inhabitants of the planet to enjoy adequate and even abundant food, so they can have the same opportunities and advantages as the affluent developed world? Or should we shun these technologies because of concerns about resilience and diversity, risking widespread famine if alternate tools do not produce sufficient yields? Or is there a third way, hoping that human behavior and patterns of consumption change on a global scale more quickly than we are able to exhaust the food supply?

These are individual mores, to be sure, and we should go ahead and empower ourselves to make informed choices through better labeling of foods. But the ease with which the developed world is rejecting the tools of biotechnology speaks to its affluence, and not to the conditions that are still prevalent for the billions in India, China, Africa and Latin America who are poised to enter the middle class. Facilitating that demands whatever solutions we can bring to bear. In biotechnology, we have, for now, an answer.

PHOTO: A Greenpeace activist displays signs symbolising genetically modified maize crops during a protest in front of the European Union headquarters in Brussels November 24, 2008. REUTERS/Thierry Roge

Paul Ryan unveiled the House Republican budget this week with an ominous yet familiar warning: “America’s national debt is over $16 trillion.” Having stated the problem, he then offered a solution, one which differed only marginally from what he’s offered the past two years. Namely: restrain government healthcare spending on Medicare and Medicaid, reform the individual tax code, close loopholes, lower corporate taxes, and promote natural gas and energy independence. The goal? A balanced budget by 2023 that will ensure “the well-being of all Americans…and reignite the American dream.”

The strongest part of Ryan’s unveiling is not the specifics, which may not be very strong at all, but the unimpeachable critique of the White House and congressional Democrats for not offering their own blueprint and budget for the future. Some of that is semantics; both the president and congressional Democrats have offered various rough outlines of their long-term budget, and now Senate Democrats offered their counterproposal. But until late they had operated more in the rough-and-tumble of dysfunctional Washington negotiations rather than with explicit, official and formal (and long) outlines of exactly what will be spent and how. Yes, each year the White House, through the Office of Management and Budget, does assess and express views about present spending. That is not the same as an explicit pathway for the future, which Ryan has indeed offered.

Such offerings are vital. You may, as I do, disagree with key elements of what Ryan and the Republicans are proposing. You may, as I do, object to the fixation on the size of the current debt without any consideration of why that debt was incurred and how much it currently costs to service it, given historically low interest rates. But Republicans are offering a set of answers, and Ryan for one is asking for those to be addressed so the process of debating and, yes, compromising can begin. No, the president is not required to offer a detailed budget; the power of the purse lies with Congress, not the White House. But a detailed vision, especially one that contrasts with the Republican one, would be welcome and productive.

Instead, what we get is mutual mistrust and bile. Assuming the worst of those you disagree with is in vogue these days, at least in politics. It’s a bipartisan sport. Just as Ryan was claiming to welcome ideas from the president and Democrats, House Speaker John Boehner made the following claim on his website: “The president [is] AWOL and unserious about eliminating the deficit.” Senate Majority Leader Harry Reid shot back that Ryan’s budget proposal “is anything but balanced, anything but fair.” The fund-raising machines of both parties jumped on these ideas. The Democratic House Majority PAC issued an email blast saying Ryan’s budget ideas were recycled (which is true) and that if his plans ever came close to becoming law they would gut middle-class safety nets. At the same time, “The wealthy, Big Oil and companies that ship jobs overseas? They’re sittin’ pretty.”

American politics, let alone any country’s politics, have never been characterized by gentility. People of strong disagreements rarely engage in heated and passionate debate that stays on point, let alone debate that begins and ends with the presumption that everyone engaged is committed to the best interests of the collective. In that sense, today’s political and economic discourse is no more or no less ad hominen, immature and demagogic than at multiple points in the past.

Still, going from adamant disagreement to disdainful dismissal requires a leap. It requires the belief that those with whom you strongly disagree are not making their own good-faith effort to solve collective challenges, but instead are attempting to “get theirs” at the expense of the rest.

That can take the form of insinuating that Ryan and the Republican Party are engaged in a relentless and purposeful campaign to gut the middle class and reward rich cronies. The Democratic Congressional Committee sent an email blast in response to Ryan saying he had “announced yet another plan to destroy Medicare just so Republicans can give massive tax breaks to the ultra-wealthy.” It can take the form of accusing Barack Obama (or other Democrats) of seeking government control and believing in socialism as a goal unto itself. If you search for “Obama” and “socialism” on Google, you’ll see thousands of hits from the fringe, yes, but they’re also from the Tea Party (which many consider fringe but still has dozens of members in the House caucus) and, of course, Fox News.

It may be that some individuals are indeed as nefarious as imagined. There may be a few people who do indeed crave government control, or wish to enrich the oil industry just ’cause, or want to gut the middle class. But have they all gathered in one political party? Did all people of these inclinations decide to enter politics, thereby driving away countless others who believe in public service? The Tea Party may be extreme in its views about the dangers of debt and the perils of compromise, but is it to a person dedicated to harming the middle class? And if so, why? Because some oil companies paid them?

We should push these casual accusations to the logical end. For instance, who ultimately benefits from gutting safety nets? Do “the ultra-wealthy” benefit from an impoverished middle class? No, nor would the Tea Party and its adherents. So is it true that a considerable bloc of politicians actually aspire to “destroy Medicare” in order to give tax breaks to the wealthy? Is it true that Democrats desire government control for its own sake? Far too often, we take these accusations at face value.

Ryan has offered a vision. He is critical of alternate visions. He rightly calls on others to counter what he has proposed, and in the coming weeks, it’s likely they will do just that. The formula that has the right amount of debt, the right amount of stimulus, and the right way to structure needed safety nets is hardly clear to anyone, and there is room for debate and genuine disagreement about how to best structure our public sector to help generate healthcare, growth and a degree of economic stability in the years ahead.

Assuming there is only one set of views that correspond to a desire for a better future assumes there is only one truth. That may work for the cardinals assembling in the Vatican to elect a new pope. But a representative democracy? We can debate it, but I’m dubious.

PHOTO: House Budget Committee Chairman Rep. Paul Ryan (R-WI) holds a news conference to unveil the House Republicans’ FY2014 budget resolution in Washington March 12, 2013. REUTERS/Gary Cameron

Is China about to collapse? That question has been front and center in the past weeks as the country completes its leadership transition and after the exposure of its various real estate bubbles during a widely watched 60 Minutes exposé this past weekend.

Concerns about soaring property prices throughout China are hardly new, but they have been given added weight by the government itself. Recognizing that a rapid implosion of the property market would disrupt economic growth, the central government recently announced far-reaching measures designed to dent the rampant speculation. Higher down payments, limiting the purchases of investment properties, and a capital gains tax on real estate transactions designed to make flipping properties less lucrative were included.

These measures, in conjunction with the new government’s announcing more modest growth targets of 7.5 percent a year, sent Chinese equities plunging and led to a slew of commentary in the United States saying China would be the next shoe to drop in the global system.

Yet there is more here than simple alarm over the viability of China’s economic growth. There is the not-so-veiled undercurrent of rooting against China. It is difficult to find someone who explicitly wants it to collapse, but the tone of much of the discourse suggests bloodlust. Given that China largely escaped the crises that so afflicted the United States and the eurozone, the desire to see it stumble may be understandable. No one really likes a global winner if that winner isn’t you.

The need to see China fail verges on jingoism. Americans distrust the Chinese model, find that its business practices verge on the immoral and illegal, that its reporting and accounting standards are sub-par at best and that its system is one of crony capitalism run by crony communists. On Wall Street, the presumption usually seems to be that any Chinese company is a ponzi scheme masquerading as a viable business. In various conversations and debates, I have rarely heard China’s economic model mentioned without disdain. Take, as just one example, Gordon Chang in Forbes: “Beijing’s technocrats can postpone a reckoning, but they have not repealed the laws of economics. There will be a crash.”

The consequences of a Chinese collapse, however, would be severe for the United States and for the world. There could be no major Chinese contraction without a concomitant contraction in the United States. That would mean sharply curtailed Chinese purchases of U.S. Treasury bonds, far less revenue for companies like General Motors, Nike, KFC and Apple that have robust business in China (Apple made $6.83 billion in the fourth quarter of 2012, up from $4.08 billion a year prior), and far fewer Chinese imports of high-end goods from American and Asian companies. It would also mean a collapse of Chinese imports of materials such as copper, which would in turn harm economic growth in emerging countries that continue to be a prime market for American, Asian and European goods.

China is now the world’s second-largest economy, and property booms have been one aspect of its growth. Individual Chinese cannot invest outside of the country, and the limited options of China’s stock exchanges and almost nonexistent bond market mean that if you are middle class and want to do more than keep your money in cash or low-yielding bank accounts, you buy either luxury goods or apartments. That has meant a series of property bubbles over the past decade and a series of measures by state and local officials to contain them. These recent measures are hardly the first, and they are not likely to be the last.

The past 10 years have seen wild swings in property prices, and as recently as 2011 the government took steps to cool them; the number of transactions plummeted and prices slumped in hot markets like Shanghai as much as 30, 40 and even 50 percent. You could go back year by year in the 2000s and see similar bubbles forming and popping, as the government reacted to sharp run-ups with restrictions and then eased them when the pendulum threatened to swing too far.

China has had a series of property bubbles and a series of property busts. It has also had massive urbanization that in time has absorbed the excess supply generated by massive development. Today much of that supply is priced far above what workers flooding into China’s cities can afford. But that has always been true, and that housing has in time been purchased and used by Chinese families who are moving up the income spectrum, much as U.S. suburbs evolved in the second half of the 20^th century.

More to the point, all property bubbles are not created equal. The housing bubbles in the United States and Spain, for instance, would never had been so disruptive without the massive amount of debt and the financial instruments and derivatives based on them. A bursting housing bubble absent those would have been a hit to growth but not a systemic crisis. In China, most buyers pay cash, and there is no derivative market around mortgages (at most there’s a small shadow market). Yes, there are all sorts of unofficial transactions with high-interest loans, but even there, the consequences of busts are not the same as they were in the United States and Europe in recent years.

Two issues converge whenever China is discussed in the United States: fear of the next global crisis, and distrust and dislike of the country. Concern is fine; we should always be attentive to possible risks. But China’s property bubbles are an unlikely risk, because of the absence of derivatives and because the central government is clearly alert to the market’s behavior.

Suspicion and antipathy, however, are not constructive. They speak to the ongoing difficulty China poses to Americans’ sense of global economic dominance and to the belief in the superiority of free-market capitalism to China’s state-managed capitalism. The U.S. system may prove to be more resilient over time; it has certainly proven successful to date. Its success does not require China’s failure, nor will China’s success invalidate the American model. For our own self-interest we should be rooting for their efforts, and not jingoistically wishing for them to fail.

PHOTO: New apartment buildings where the local government built homes for former miners and farmers as part of an urbanisation programme, are seen in Mentougou district, suburb of Beijing, February 28, 2013. REUTERS/Kim Kyung-Hoon

Everyday, we are treated to a new peril: Today we have sequestration, a word not much in anyone’s lexicon until recently. The mandated cuts to the federal budget, $85 billion by last count, will further stunt anemic economic growth, or so economists and the Congressional Budget Office guesstimate. The prognostications surrounding the sequester have been grim, with White House Chief of Staff Denis McDonough warning of a “devastating list of horribles,” ranging from severe travel snafus to the end of vital education programs.

In the political media, in Washington, and in the defense industry (which will see especially draconian cuts), all of this is Big News. But after months of buildup, the end-of-days drama is ending with a resounding thud. The meh reaction of financial markets of late is particularly telling (the Dow flirted with its all-time high this week). Markets are mood rings, and the mood now is one of boredom and fatigue. Even the New York Times led page 1 not with the sequester but with a studied picture of a nun saying goodbye to the retiring pope.

This is a good thing. Since the housing market imploded six years ago, we’ve been suffering from black swan fever. When Nicholas Taleb penned his passionate polemic about the inability of financial markets to allow for unanticipated and rare events (“black swans”), he did us all a great service in highlighting the narrow-mindedness that can have dire consequences.

Then the pendulum swung too far. Instead of complacency about rare, destabilizing events, the markets, the media and the politicians developed a fixation: Find the next black swan. That has led to a belief that any sign of stability, any indication that the worst may have passed is simply a false dawn. Luckily, that skittishness has passed.

Yes, financial markets have been in a holding pattern of late. But if what is happening now had happened in the past few years, the markets would have been roiling. Flat markets now are a good sign.

This week alone, Italy’s elections did not go as many outside of Italy would have hoped, but the markets shrugged. Instead of ushering in a center-left coalition committed to austerity and labor market reform, there was an indecisive result whose main winner was a professional comic whose message is throw-the-bums-out. Later in the week, the official Italian unemployment figure was announced as close to 12 percent and economic activity contracted more than expected.

With the week bookended by renewed concerns about the eurozone and the sequester, you would have thought markets would easily slip into a panic that has been all too familiar of late. They have not.

In fact, during the past three years of rolling crises, equities and bonds have been on a quiet tear. Since May of 2010, the S&P 500 is up nearly 40 percent, and there has been a boom market in bonds as yields have fallen globally. That has not helped people who put their retirement income in government bonds or money markets, at least not directly, but it still demonstrates the disconnect between the climate of fear that has suffused our economy and political life and the relatively stable bull market that has been chugging along at the same time.

Markets, of course, are easily mistrusted. The frequent response if and when the strength of financial markets is noted is to dismiss them as a) irrelevant to the real economic lives of most people and b) artificially and hence temporarily inflated by central banks around the world pumping easy money.

These rejoinders reflect both long-standing and sometimes justified anger at the way financial markets have imperiled global prosperity repeatedly over the past century. But they also reflect a black swan culture that has rejected any metric that doesn’t reflect crisis, and thankfully, that culture appears to be waning. Each new crisis in the last few years – Greece will leave the eurozone; China will implode; the U.S. will default; debt will destroy us – has fueled panic. But the whole point of black swans was that they are rare and unforeseen, not that they are common, frequent and easy to identify. Markets, media, politics, the blogosphere, etc. have been so gripped by that fever that each new challenge is perceived not as an issue to confront but as a crisis about to derail us.

The end of crisis culture doesn’t mean we should cease being vigilant about risks, but it is a needed and healthy shift. Crisis and panic are not optimal states for addressing problems, which may be why Washington remains incapable of actually addressing problems. Washington, however, is not the end all and be all of American life, especially not of economic life. There is life outside the Beltway, not just in the United States but in thriving economies around the globe, that do not revolve around the desiderata of the beltway. The dynamism that abounds – whether in Silicon Valley or São Paolo, whether in Hong Kong or Austin – is one reason so many companies have been faring so well, and in part why financial markets have been quietly booming.

You can object to that rationale, as many certainly will. You can claim the game is rigged, that the few are benefitting to the exclusion of the many. Some of that is true, but only some. We’ve been stuck in a time when the only story told or deemed credible is the anxious one. We’ve been gripped by black swan fever. At last, perhaps, the fever has broken.

PHOTO: A black swan and flamingos are seen in their snow-covered enclosure in Jerusalem’s Biblical Zoo January 10, 2013. REUTERS/Ronen Zvulun