Opinion: Is It Twilight in America?

In 1984, Ronald Reagan's campaign said, "It's morning in America." The idea was very compelling to voters, and he was re-elected in a landslide. Americans love the beliefs that this country always has its best days ahead of it, that their children will have a better life than they did, that things are always going to get better in the long run.

This kind of optimism is a wonderful thing. It's part of why we've been able to do so many great things as a country during the past three centuries. Unfortunately, optimism alone will not solve our current problems. What we need at this point is a heavy dose of reality and honesty from our nation's leaders, even if that means telling people things that will be very unpleasant to hear.

What do I mean specifically? For example, the most fundamental economic problem we face is not a credit crunch, or unemployment, or falling home prices, or a stock market crash. All of those things will naturally correct themselves over time. Of course, that assumes our economy stays capitalist, which at this point may not be true.

In any event, the most serious economic problem we face is a severe lack of private savings and sustainable income generation to support the expenses of our government and the private standard of living for our citizens.

For example, even with historically low interest rates, the ratio of our consumer debt payments relative to income is at an all-time high. The Bureau of Economic Analysis reported in December that savings from current income for most Americans may be zero or negative when financial outlays are financed by borrowing.