In its news pages, the New York Times focused on what Wall Street officials, academics, and TV commentators have come to call the “new normal” – in which the economy grows too slowly to reduce unemployment, stocks and bonds “yield paltry returns,” and the biggest victim becomes “the optimism that’s been at the root of American success for decades, if not centuries.”
New York Times columnist and Nobel laureate Paul Krugman painted a broad picture of American impotence, telling us that, in a nation that once invested proudly in its human and physical capital, communities are turning off street lights to save money, cities are breaking up streets that they can no longer afford to pave and returning them to gravel, and school districts are firing teachers or shortening the school year.
Washington Post columnist Robert Samuelson, who has relentlessly urged policymakers to address the nation’s spiraling budget deficits, nevertheless warned that they must be do it the right way or suffer the consequences. He noted that current budget policies “punish parents, who are taxed heavily to support the elderly” while providing only “modest” tax breaks for children.” If future deficit reduction “aggravates these biases,” Samuelson said, “more Americans may choose not to have children or to have fewer children. Down that path lies economic decline.
To be sure, the arguments of our commentators are compelling as are the “facts on the grounds” to which they allude. Lest we accept their grim prognoses, however, we might want to remember something.
Predictions of American decline are, quite literally, as old as the nation itself. For as long as there has been an America, there have been prognosticators to forecast that its best days have come and gone.
Europeans expected the new nation to fail. Americans then viewed their struggles in the War of 1812 ominously. Later in the 19th Century, Americans fretted about the long-term impact of the Civil War, Reconstruction, the Panic of 1873, and the economic transition from farming to manufacturing.
Not even America’s emergence as the world’s dominant power after World War II could stop declinism from rearing its head. Mao’s takeover of China, the U.S. stand-off in Korea, and the Soviet launch of Sputnik – among other U.S. setbacks – ignited claims that America had lost the Cold War almost before it began.
The 1970s brought another bout of declinism. This time, it was America’s defeat in Vietnam, the Iranian hostage crisis, Soviet and Cuban adventurism in Africa, and the Soviet invasion of Afghanistan that fueled the prophets of doom.
Then came the last decade, with the U.S. struggles in Iraq and Afghanistan, China’s rise, and Russia’s resurgence each raising questions about America’s continued dominance of world events. The recent global economic crisis, which raised questions about the staying power of U.S.-led free market capitalism, only provided further ammunition for the most recent prophets of American decline.
So, we have seen this movie before. For over two centuries, we have witnessed hot wars and weak economies, surging deficits and soaring social problems, urban unrest and communal decay – and they have each shaken our collective confidence.
But, facing each hurdle, we have always found a way to jump just a bit higher. We have prevailed at war, rebuilt our economy, re-balanced our budget, and surmounted the social problems.
Yes, we again live in troubled times. We have no shortage of challenges at home and abroad. And we could, in fact, stumble into long-term decline, with a weaker economy and a less prosperous future, if we do not act wisely.
But decline is hardly inevitable, and it is surely avoidable. We retain the capacity to prevail once more.
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Lawrence J. Haas is former Communications Director to Vice President Gore and, before that, to the White House Office of Management and Budget. He's now a public affairs consultant who writes widely about foreign and domestic affairs, including fiscal policy.
