The United States is reported to be ahead of other countries in its millennium bug preparations - but with its reliance on technology it also has more to lose from computer breakdowns.

The US government has been addressing the Y2K issue for about 10 years and has set a federal budget of more than $7.5 billion to fix the bug.

The financial services sector is ahead of other industries in tackling the Year 2000 problem because long-term loan and other trade securities agreements forced them to look at the issue much earlier.

Confidence or panic?

The signs are that public confidence is growing that any Y2K disruption will be minimal.

According to a telephone survey carried out by Gallup in May, nearly 79 per cent of people were confident the Y2K problem would have "little or no impact" on their personal finances.

The Federal Reserve has estimated each US household will withdraw an average of $500 in the days leading up to 1 January 2000. But there is a risk that the public could panic at the last minute and withdraw hoards of cash from bank accounts.

Business contingency plans

Companies are having to accept that the millennium bug will cause at least some disruption and are making contingency plans.

It is not just failure in internal computer systems that could be a problem, but interruptions to supplies, transport and communication links - disruptions that companies cannot always control. Contingency plans will need to take account of potential local disruptions in power supply, water, and telephone lines - similar to problems experienced during natural disasters.

But those plans could run into trouble if too many firms come up with similar solutions. For example, purchasers are visiting suppliers they do not currently use to see if they could step in at short notice. If several companies were to turn to the same back-up plan, there would be obvious problems.

A litigious society

The problem that is probably causing the most anxiety to US businesses is the threat of lawsuits if things go wrong. Recent polls have suggested managers are confident about dealing with computer glitches - but it could also mean they are not being honest for fear of legal problems later.

In June, the White House and Congress agreed on legislation to limit lawsuits that follow from Year 2000 computer problems, but companies are bound to be nervous.

The computer industry backed the bill, opposed by trial lawyers and consumer groups. It sets a ceiling on punitive damages against small businesses, gives companies 90 days to fix problems before lawsuits can be filed, and protects big companies from having to take responsibility for the problems caused by smaller companies.

-- Old Git (anon@spamproblems.com), August 26, 1999