The current economic crisis has elicited numerous responses declaring that we’ve been through worse and that we’ll get through this. Warren Buffet’s version of this combined caution and succor is this:

Amid this bad news, however, never forget that our country has faced far worse travails in the past. In the 20th Century alone, we dealt with two great wars (one of which we initially appeared to be losing); a dozen or so panics and recessions; virulent inflation that led to a 21 1/2% prime rate in 1980; and the Great Depression of the 1930s, when unemployment ranged between 15% and 25% for many years. America has had no shortage of challenges. Without fail, however, we’ve overcome them.

I’ve had many patients use a similar reasoning after I admonished them to discontinue some unhealthy practice. They recall how they’ve survived some previous illness and how they’ll get through the current or the next one. Basically their reasoning is I’ve lived 60 (put in any number you like) years without dying therefore I’ll never die. The same reasoning animates Buffet’s declaration. We’ve been through terrible times before and survived therefore we’ll get through this.

Of course we may. But consider the remark of Scipio Aemilianus after he had razed Carthage to the ground (146 BC): “This is a glorious moment…; and yet I am seized with fear and foreboding that some day the same fate will befall my own country.” Sometimes quoted as “Nations have their lives as do men. One day the hour of Rome will toll.” It took 600 years before his prophesy came to pass.

It is not inevitable that we will survive any crisis. Only two things are inevitable. The current economic crisis is not just the result of a credit crisis secondary to bad real estate loans. It’s the consequence of half a century of international bailouts and flooding the world with fiat currency. How many of these bailouts can you name off the top of your head? How many people can distinguish among commodity money, receipt money, fiat money, and fractional money? How many can define the way banks operate? I’m talking about “good” banks following standard banking practices. Yet the public must either support or reject current economic policy.

Flooding the world with untold trillions of dollars to stem a crisis caused by too much fiat money to begin with can only have bad consequences. This practice is not new. Debasing the currency has a two thousand year history. The result has always been the same – bad. Politicians and banks and business cannot stop themselves from this practice. Party affiliation is irrelevant. They’ve got to do it. The rationale is always the same. If we don’t do this (whatever bad practice is on the table) the world will end and the sky will fall. Who has the nerve to challenge this assertion? So we keep on doing bad things, postponing effective resolution of our fiscal problems until one day the sky actually does fall.

Of course even then the world doesn’t end. It may get rearranged a lot, but it goes on. The rearranging however may prove fatal to parts of the world. One day the hour of (fill in whatever nation you please) will toll. Survival is not guaranteed – just the opposite.