Politicians are like New Year's revelers whose resolutions to get fit are as habitual as their unhealthy lifestyles. The most undisciplined merrymaker continually ups the weight-loss ante —10 pounds last year, 20 pounds this year — just as undisciplined politicians alleging fiscal prudence have upped their borrowing limit 4,967 percent since 1962, 67 percent since 2009.
If you thought politicians were pummeled into fiscal restraint after last summer's debt-ceiling debacle, which led to America's credit downgrade by S&P, Think Again. In fact, 2011 ended with debt reaching the new limit of $15.22 trillion compelling Treasury to request another $1.2 trillion debt ceiling increase. This time the increase will happen easily because new rules require both House and Senate disapproval to block it — not likely.
Like a long-running soap opera whose actors change though the story line doesn't, we spend $4 billion more than we have every day — and growing. Since 2008, spending skyrocketed past our historical average of 20 percent of gross domestic product to 25 percent.
The problem isn't merely the amount of debt — though as Sen. Obama asserted before voting against the 2006 debt-ceiling increase, “Washington is shifting the burden of bad choices today onto the backs of our children and grandchildren” — it's the size of the debt relative to our economy that reflects poor economic health. With our debt-to-GDP ratio at 100.3 percent versus 69.8 percent in 2008, we're living on “borrowed” time unless politicians stop deluding themselves that a stagnant private sector can finance a growing public sector.
The eurozone crisis offers America a timely warning that the battle of the spending and debt bulge is an existential one. Europe's saga is our “Chronicle of a Death Foretold,” except America can avert doom by slashing spending levels and lifting private-sector burdens. If Sweden, Ireland and a new reform-minded Spanish government can do both — the reverse of what we've done during the Great Recession — America should, too.
Americans agree, as 71 percent told a Rasmussen poll last week that Washington should cut spending. Absent the political will to reform entitlements and lower spending to pre-2008 levels, “the country is going through one of its longest sustained periods of unhappiness and pessimism ever,” observed Democratic pollster Mark Penn.
Distracted as we are by domestic matters including the media-hyped Republican primary horse race, Americans aren't focused on the international implications of a downgraded superpower. An America in economic distress undermines our capacity to perform the valuable role we've played since World War II — to promote global economic growth and political stability, especially among the poorest nations.
America is the most important trading partner to the world, inducing countries to adopt economic freedoms that enabled our prosperity, including limited government, property rights, free trade and a stable currency. Economically free countries enjoy greater growth, opportunity, civil rights and life expectancy, as evident on the Korean Peninsula, where South Koreans have dramatically better lives than their northern cousins, and in China, where 450 million people were lifted out of poverty after economic liberalization.
America used to rank second in the Wall Street Journal/Heritage Index of Economic Freedom (behind Hong Kong) but fell to ninth this year (below Canada, Ireland and Denmark), reflecting deteriorating business freedom, increased government spending and a weaker currency. Reversing this trend is essential to growth and job creation, otherwise we risk becoming collectively poorer as the world becomes progressively dangerous.
Dictatorial regimes, strategic adversaries and state terrorism sponsors tread more carefully when America is strong; conversely appearing weak and distracted emboldens enemies, frightens allies and undermines U.S. interests. Being a downgraded superpower renders us vulnerable and less prepared for emerging global threats including: a nuclear-hungry Iran intent on Israel's destruction and the transformation of an extraordinarily volatile Middle East; a jihadist-infested nuclear Pakistan; an increasingly militarized China to whom we owe $1.1 trillion; and a nuclear North Korea whose new, 26-year-old dictator poses many challenges.
Stuffed with pork, America suffers from the economic equivalent of arteriolosclerosis, the kind that presages fiscal heart attacks. The symptoms include the loss of our AAA credit rating, fragile business confidence, economic stagnation, persistently high unemployment rates and chaotic financial markets.
Nevertheless, a coronary isn't inevitable. Bequeathing our children a weaker, divided and vulnerable America is a choice, not our destiny. America's economy is the world's largest, producing one-quarter of global GDP, thanks to a 100-year average growth rate of 3 percent. Therefore, our singular objective should be to reclaim the growth that creates jobs and opportunity, not redistribute an ever-shrinking wealth pie nor designate economic winners and losers. First, however, we must accept that even the most prosperous nation in world history can't afford the government we've acquired.
As this election year debuts, voters must implore elected officials to Think Again — return America to “fiscal fitness” or risk being “bypassed” next November.