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Governments, economies and the environment are more fragile than we thought.Denis Cahill

All Canadian drivers know the terror of skidding on black ice. It's one of those great national unifiers, like hockey and Tim's double-doubles.

If we're lucky enough to avoid a crash, we breathe an enormous sigh of relief, but we don't return to driving as normal. We shut the radio off. Talking and laughing cease. We slow down, squeeze the wheel and drive with exaggerated focus. It's instant sobriety.

There is a resonance as we look forward to the decade starting in 2010.

Recent decades can be loosely defined by a word or a phrase. Social upheaval in the 1960s. Flash and entitlement in the 1980s. Rage and disillusionment in the 1990s.

The 2000s? Fear.

From the first few minutes, when we panicked about lights shutting off and planes dropping out of the sky, fear defined the 2000s. Y2K proved to be a non-event, but it set the stage for a decade of terrifying events.

Consider the big news stories of the past 120 months: Collapsing tech stocks. Planes slamming into the World Trade Center. Bombings in Bali, Madrid and London. Anthrax. The Beltway sniper. The Indian Ocean tsunami. Eerie videotapes of a bearded man named bin Laden. Hurricane Katrina. SARS. Drowning polar bears. The near collapse of the global financial market. H1N1.

Even when economic times were good, there was fear. In the United States, people feared missing out on the housing market and piled crazily in to whatever real estate they could. China's rise as an economic powerhouse has been, on balance, tremendously beneficial for the global economy. But this has stirred irrational fears of the Chinese taking over the world. (The host's medal count at the Beijing Olympics may have been a harbinger of things to come!)

Fortunately, fear has a way of clearing and sharpening the mind. A near-collision on black ice brings an adrenalin rush that heightens our senses and refocuses our attention. And, at its best, fear is an essential survival instinct as it helps us avoid legitimate dangers in the future.

If fear marked the 2000s, maybe a post-panic sobriety will mark the next 10 years. Focus, caution and greatly lowered expectations might be what we look back on in December, 2019.

While a decade of caution and lower expectations may not sound like much fun, we're due for one - particularly around public finance. Government debt levels around the world have ballooned nearly out of control, and credit-rating agencies are fearful (there's that word again) that some governments may be rendered insolvent in the coming years. While small countries such as Iceland and Greece have already been smacked down pretty hard, even the giant U.S. and British governments have had their fiscal knuckles rapped. Japan is hanging by a thread.

A decade of sobriety and lower expectations will begin with a realization that governments cannot keep stimulating forever. Through higher taxes, lower spending or a combination of both, public spending must be brought under control. None of this will be welcome news to voters, but we will have no choice.

On the bright side, we can hope that the decade of fear has handed us a few lessons - lessons about excess, entitlement and greed. During the two most fearful events of the decade, 9/11 and the market meltdown of 2008, we learned that we actually don't know very much at all. We were shaken and humbled. Like a hard slap in the face, we were taught that our governments, our economies and our environment are much more fragile than we thought.

However, being handed a lesson and learning a lesson are different things. Will the coming decade bring about the sobriety we need? Or will our memories be short? If excess, entitlement and greed are not curbed, the world can anticipate more horror in the decade starting in 2010. And if we do not accept that government deficits and debt must be controlled, we will only prolong a much worse fate later on.

We say goodbye to the decade of fear, but we won't miss it. When we ring in the new year, we will remember to tread lightly. The economic and political road signs are still warning us: Caution! Icy Conditions Ahead.

Todd Hirsch is a Calgary-based senior economist at ATB Financial. The opinions expressed are his own.

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