SEPT. 24, 2028
Dear grandchildren:
Now that you're old enough to begin understanding the world you have inherited, let me try to explain what happened.
By rights, the United States should be in far better shape for you. But your elders failed to deliver "what is due to their posterity," in the words of a conservative British politician who thought about these things a long time ago.
It didn't happen all at once. Nobody intended to leave the country to the next generation diminished in influence and avoiding calls from debt collectors. But little by little, through negligence and appetite, the nation took from the future and gave to the present.
Maybe credit cards were the beginning.
The idea that banking companies would make huge unsecured loans to almost anybody who walked in off the street once would have been loony. But that's what happened in the 1990s and early 2000s.
As the plastic balance grew to $2,000 or even $10,000 for many households, their disregard for the future could be seen in the ruinous 20 percent interest rates they seemed quite willing to pay.
Recklessness infected the corporate boardroom. More and more, CEOs forced short-term profits from their companies at the cost of damaging the long-term franchise.
Often they risked the whole business. So what if they failed? They floated on golden parachutes into silk featherbeds while shareholders hit the wall.
Government got into the game, too. Washington often spent more than it took in during wartime, but starting in the late 1970s the tab got bigger and bigger in peacetime. We blew billions on congressmen's pet projects, enormous corporate subsidies and the increasingly expensive Medicare program, all while ignoring essential infrastructure.
The Great Housing Crisis of 2007-2010, however, offered a chance for everyone to get into even bigger trouble. Washington printed money with abandon. Business lent it without scruple. Home buyers borrowed it with a vengeance.
The borrowed money, when it finally came crashing down, threatened to sink the country into depression. To try to save the day, there was only one thing left to do: borrow more money.
When President Bush entered the White House, the national debt was about $5.8 trillion, a dreadful amount. When he left in 2009, it was pushing $11 trillion. A big part of the increase was caused by an unnecessary war in Iraq that cost the country even more in blood, wounds and influence than it did in dollars.
The housing rescue didn't have to push things over the cliff. True, the nation spent a trillion dollars bailing out irresponsible borrowers and lenders.
But after the economy recovered from the mess, the government could have imitated the newly responsible consumers and corporations of the 2010s. It could have begun spending less than it took in. With judicious tax increases and spending cuts, it could have started to balance the books, restore confidence to the dollar and reduce reliance on foreign lenders.
But none of those things happened. The country's failure to address its problems decades ago is to blame for the even larger national debt, sluggish growth and high, innovation-stifling taxes it faces today, in 2028.
Debt is great if you invest the proceeds productively. But this hasn't happened with the government. We bought baubles and weapons when we should have fixed our leaking roof. The economic growth gained from each new dollar of federal debt has been sinking since the 1980s and plunged in the 2010s.
So now the country finds itself in the same situation so many homeowners did during the crisis. Interest payments take up more than half the government's income. Nobody wants to refinance us, not even our faithful creditor Paraguay, the economic powerhouse of the 2020s.
These days, the entire United States is subprime.
