A Pessimistic Nation – and Six Principles to Help Get Over It

Bob Beauprez
Posted: Mar 03, 2013 12:01 AM

Americans historically have been the can-do people. Even in the darkest of times, Americans manage to see their glass as more than half full. Seemingly woven into our DNA is an expectation that the lights will forever burn brightly within the "shining city on the hill."

Even from colonial days, every generation somehow managed to hand off an even greater life filled with opportunity to their children. By the time our upstart nation was barely fifty years old, Alexis de Tocqueville gushed with praise about America's unique advancement of "human greatness and freedom."

Our national belief of an always better tomorrow developed a name: "The American Dream."

But, something is happening in America. Something unusual, foreign to whom we are as a people. Pessimism is creeping in; a sense of doubt.

By a margin of 2:1 Americans believe the U.S. is weaker and less respected than she was four years ago.

The snail's pace of the economic recovery that supposedly began more than three and a half years ago has beaten people down. Regardless of President Obama's assertions that the economy is headed in the right direction, a majority of Americans (52:40) recently polled believe the worst is still yet to come.

A Rutgers University study found that 60 percent of Americans believe "that the nation's economy has undergone a permanent change." More than half of those surveyed think it will take "at least six years" to fully recover – 29 percent don't believe we ever will.

Assessing the findings of the survey, Rutgers professor Carl Von Horn said, "Five years of economic misery have profoundly diminished Americans' confidence in the economy and their outlook for the next generation." American workers – historically the most productive and optimistic in the world – Von Horn said, "are deeply pessimistic."

Unsurprisingly, with pessimism running so strongly, Americans are less than confident in their leaders and government dissatisfaction is on the rise. For the first time ever, the Pew Research Center reports that a majority of Americans (53 percent) believe "the federal government threatens their personal rights and freedoms."

Public trust in government as documented by Pew since 1958, reached a historic low in 2012, with more that 4-in-5 Americans expressing varying degrees of distrust. Even with Obama in the White House, 59 percent of Democrats currently express distrust of government; 78% of Independents.

The recent "fiscal cliff" debacle culminating without any long-term solution exacerbated an already anxious and frustrated people. During those tense weeks of negotiations in December 2012, Rasmussen found that 73 percent of Americans surveyed favored cutting government spending to aid economic recovery. But, Washington was in denial.

"We don't have a spending problem," President Obama reportedly told John Boehner. Former Speaker Nancy Pelosi professes that it is "a false argument to say we have a spending problem."

Source: Sen. Rand Paul, Investor's Business Daily

With so much gloom, Gallup found that just 44% of Americans still cling to a belief that today's youth will have a better life than their parents – an all-time low.

Winston Churchill observed that, "The Americans will always do the right thing, after they've exhausted all the alternatives." We've dug ourselves a very deep hole, and made most all of the possible mistakes, but there are still options. What's lacking is leadership.

As Congress and the White House circle the wagons in coming weeks to yet again deal with the sequester deadline, the latest financial crisis de jour, they should begin by adopting key consensus principles including:

1. Don't raise taxes

The problem is not that we are under taxed. The Feb. 2013 CBO report states that "revenues are projected to grow from 15.8 percent of GDP in 2012 to 19.1 percent of GDP in 2015—compared with an average of 17.9 percent of GDP over the past 40 years. Under current law, revenues will remain at roughly 19 percent of GDP from 2015 through 2023." Revenue is not the problem; it's the spending!

2. Reform Entitlements

Even FDR admitted that the original construct of Social Security was unsustainable and would need to be reformed. It isn't as much about public policy as it is about arithmetic, and the numbers don't lie. Without reform Medicare, Medicaid, and Social Security will not only become insolvent, they will take the rest of the country along with them. ObamaCare also needs to be repealed, too – but, good luck with that any time before January 2017.

3. Adopt strict Spending Limits

A Constitutional Amendment would be best, but in the meantime, Congress must be willing to tie their own hands. The principles of the Spending Limit Amendment are a good idea – limit total spending to a maximum of 20% of GDP – and they should get there within five years. That would force them to address entitlement reform and discretionary spending while adopting pro-growth economic policies that would result in increased revenue.

4. Systemic Reform of the Tax Code

Every time Congress nips-and-tucks at the tax code, it morphs in to an even uglier monster. Everyone agrees it is incomprehensible and discourages economic expansion. The House should immediately begin hearings on systemic reform – not just for show, but to ultimately replace the current mess with something that encourages investment, invention and growth, breathes confidence back in the market, is seriously fairer, flatter, and understandable.

5. Put the Brakes on Regulations

Compliance with federal regulation already costs the economy $1.75 trillion per year according to analysis by the Small Business Administration – and that's before ObamaCare kicks in. The cost of regulatory compliance is like a hidden tax burden on the economy. The Federal Register has exceeded 80,000 pages each of the last three years. The Senate should immediately adopt Sen. Rand Paul's REINS Act that has already passed in the House. It would require Congress to approve every new major rule proposed by the Executive Branch which has an annual economic impact of $100 million or more before it can be enforced on the American people. Even that won't be enough, but it would be a good start.

6. Preserve our national security

One of the biggest lessons from the 9/11/01 attacks was that we created our own weaknesses and failed to imagine that an enemy would so viciously exploit our vulnerabilities. America is safer, and the world is more peaceful when we are strong. Penny-wise and pound-foolish is not a national defense strategy. The world is more dangerous and unstable than it was four years ago. This is not the time to repeat past mistakes. The Pentagon should participate in efforts to control spending, but our security and obligation to those who serve our nation can never be compromised.

The six principles above may not be complete, but they would be a good place to start if Congress and the President were only serious about trying to restore confidence and belief in the permanence of this great Republic.