It is strange to contemplate the end of the world from The Happiest Place on Earth. Wall Street may be littered with broken dreams, the streets of London may be in flames, but the streets of Walt Disney World are clean, flower-decked and relentlessly cheerful. The dollar is weak, the nation’s credit questioned, but the state of the Disney brand is strong.
Yet somehow it doesn’t seem sufficient — except at the White House — to whistle a happy tune. The Great Downgrade of 2011 seems not an aberration but a culmination — and perhaps an old hag’s maleficent prophecy.
The proximate cause of this embarrassment is a political failure. Congress and the president strained to produce an internal agreement on the budget that bears little relation to external economic requirements. Its long-term approach to debt — lacking any serious entitlement reform — is timid and illusory. Its short-term austerity is counterproductive in a stalled economy. The real economic need is exactly the opposite: long-term austerity and immediate inducements to investment, growth and hiring.
The bipartisan debt panel, facing the threat of automatic spending cuts, will probably produce additional budget cuts. But the process is itself a kind of confession. The nation’s elected representatives could not perform their normal, necessary work. So they have turned over a portion of their authority to a spending star chamber. Courage will now be outsourced. This may reduce outlays; it will hardly restore confidence in the American political system.
Yet the ultimate cause of the economic malaise is not a political failure but a political choice. Since the New Deal — and especially since the Great Society — America has chosen an accelerating transfer of wealth from young to old. Some of this was necessary and desirable. Many seniors face a period of economic struggle toward the end of life, which entitlements have effectively, compassionately eased.
But longer lives have extended this period of dependence, while health-care inflation has dramatically increased the cost of the Medicare entitlement. According to Andrew Biggs of the American Enterprise Institute, someone who retires today will pay for less than half of the Medicare benefits he or she is likely to receive over a lifetime — a subsidy given to even the wealthiest retirees. The balance of these costs is imposed on workers or added in debt.
The problem is that there are two periods of economic dependence in life — late and early. A healthy society not only cares for its elderly but also cultivates its children. Biggs estimates that the federal government now spends $6 on seniors for every $1 it spends on children, even though the poverty rate of children is much higher.
From a historical perch a century hence, this will seem an odd, sad decision. A country that increases taxes on current workers and encumbers children with debt to maintain unreformed health entitlements is looking backward. Unless this course shifts, America will have a continually diminished capacity to invest in children and young families. It is the evidence of a generation that prefers its own future comfort to the welfare and ambitions of generations to follow. And this attitude is the mark of a tired nation.
No wonder our politics seems so shallow and shabby. It is the way we all feel after we have been grabby, thoughtless and selfish.
Such fundamental economic choices lead to more than a credit downgrade. They involve an unfolding logic of decline. The young are reduced to sources of revenue for the entitlement state — their productivity consumed by others. Economic stagnation turns the nation inward, yet fiscal constraints make creative public policy on education or economic mobility difficult to pursue. Defense spending becomes an easy target for austerity, eventually leaving the military hollow and dispirited. American global leadership appears expensive, burdensome and irrelevant to domestic discontent. Abdication — “leading from behind” — is elevated as a virtue. Some nations are disoriented by American retreat. Others try to fill the economic and military vacuum. Still others attempt to challenge American weakness.
This curse may still be lifted. But President Obama seems overwhelmed by events and ideologically unprepared to promote economic growth or reform entitlements. Most Republicans, so far, have focused on discretionary spending cuts that do little to address the long-term debt challenge, and few have managed a vision of economic hope beyond austerity.
But these are not happy thoughts, which is a kind of treason here at Disney World. And so I prefer to wait in line, sweat and dream.