Are we trading the American dream for the Japanese nightmare?

President Obama and Speaker of the House Boehner both wasted their opportunities to address the American people Monday night. They repeated familiar formulations, made no progress, offered no hope. Indeed, they offered the American people a display of empty petulance that will only confirm their darkest fears that Washington is now hopelessly broken. Obama's call for compromise and balance was far more lucid, rational and constructive, but, even as one who is very supportive of the approach offered by the President, watching the remarks I was forced to acknowledge that neither man led us one inch closer to the resolution of the unnecessary, man-made crisis that now holds the United States and the global economy in its thrall.

As Melissa Harris-Perry stated accurately in wrap-up comments on MSNBC, if this kind of display served anyone at all, it was the Republicans who argue that government is the problem. To them, it hardly matters that they are the ones who have guaranteed that theirs is a self-fulfilling prophecy. Which of course, would be just breathtakingly cynical were it not so dangerous.

It's dangerous of course, because government is not the problem. Indeed, for those who expect a functioning national defense, or stewardship of our national resources, or care for those who cannot help themselves, or education for our children, or the infrastructure we need to compete in the world, government is an essential part of the solution. In fact, in times like these, it is an even more important part of the solution than it is when the economy is more robust.

Similarly, one of the great lies at the heart of this debate is that the U.S. government is too big. The U.S. government's share of the economy is large and our budget is inexcusably out of balance, but those are both very different things than the bloated public-sector bully that the "too large" label implies. The vast majority of government's share of the economy is in payments to those who need assistance for health care or to pay for their retirements or for unemployment. It's not for rule-makers but for service providers, not for those with power over Americans but with those who work for them. Indeed, it is arguable that, given the power ceded over time to markets to set currency values, given the impact of globalization and trade deals on opening our borders, given the formulation of laws that appropriately constrain government power and eliminate public sector discretion over the behavior of citizens, that this government, regardless of the dimensions of its budget, may in many important ways be the least powerful in American history.

That said, at the moment, despite Republican efforts to evoke the threatening specter of a super-intrusive government that doesn't really exist, it's not the power of public institutions that at the moment commands our attention. It is the sad behavior of those who have been entrusted with the stewardship of those institutions. So consumed are they with their own ambitions that they are willing to practically invite ratings agencies to downgrade America, raise the cost of borrowing, choke off our growth, inflate the costs of our debt, create an entirely new and unnecessary burden on the American people. They dissemble as the Speaker did when he called his "cut, cap and balance" bill bi-partisan when it managed the support of only five Democrats. They deny logic and fairness when they suggest it is appropriate to balance the budget by taken from the needy while preserving the privileged tax status of the rich and of large corporations. And, in the president's case, they shirk responsibility when they suggest this is a Republican problem when for months the White House did precious little to move this forward or address the deficit when it had countless opportunities to do so. (As Vermont Sen. Bernie Sanders said afterwards, the president's speech was pretty good but it probably "should have been given six or seven months ago.")

Of course, as disturbing as Monday night's display was to those hoping for reason and progress, there is an even more disturbing scenario. What if the dysfunctionality in Washington is not evidence that our system is broken but that it works too well, too accurately reflecting the nature of our society, the divisions among our people and the views they actually hold?

If that's the case, this most recent circus is not an aberration, but a harbinger. And if it is true, we are headed toward not one possible downgrade, but many, not toward the renewal of the American dream but to what might be called the onset of the Japanese nightmare, as we drift hopelessly toward the decision-less, leader-less, direction-less government much like that which has kept Japan trapped without relief in dire economic straits for almost two, long, hard decades now.


David Rothkopf

Meanwhile, back on planet earth…

While the absurd spectacle of America's debt ceiling follies flickers before us like a silent movie melodrama (the inevitable, concluding sequel to "Birth of a Nation?") it is worth remembering that the hot story of the moment is not the only story.  It's not even the big story. In fact, as was the case with America's involvement in Iraq, once again the most important story is the cost of our once again being distracted from the important by the seemingly urgent.

If you were to make a list of the most important priorities facing America today, this debt ceiling charade would not be anywhere near the top. And if you make such a list, let me know.  I'd like to read it.

In the meantime, let's take a look at my list of the top priorities being neglected by the President and Congress while they, to evoke the imagery of The Who, "fiddle about" with our finances.  As it happens, every one of these is domestically oriented...but all have profound international consequences and fall under the rubric of what Richard Haass accurately describes as the goals of American restoration.

10. Meaningful Immigration Reform
It's overdue. It's a vitally important issue not only in border states but everywhere we want to wisely embrace the energizing presence of new Americans as we have throughout our history.

9.  Restoring America's Infrastructure
Neglected for 50 years, with the Congress currently thinking of new ways to underfund it, it is one of the few sure ways to enhancing our competitiveness and create millions of jobs in the near term.

8. Real Financial Reform
Dodd-Frank was inadequate even before lack of funds and support and legal challenges and slow implementation made it nearly impossible to implement the limited benefits it offered.  However, big issues like financial institutions that are too big to fail and massive concealed risks associated with derivatives markets have yet to be addressed and remain a major threat to national and global financial stability.

7.  Real Healthcare Reform
Call it Obamacare, call it Obomneycare, call it Banaramacare, it's a band-aid on sucking wound of the chest.  Until retirement healthcare is funded, America's fiscal house is not in order, our economic future is at risk and our promises to older Americans are virtually certain to be broken.

6. Real Education Reform
The secret of American leadership in the 21st century is not a policy, it's our people.  Our children are falling behind global standards and we are currently planning spending cuts.  The solutions are there: longer school years, real teacher pay reform...based on real merit metrics, better use of potentially revolutionizing technologies, a national curriculum.  But we're just playing at the edges with current initiatives, however worthy they are.

5. Energy and Climate Policy Reform
Neither the reality of global warming nor multi-trillion dollar conflicts in the Middle East have awakened us to the essential need to have the coherent energy and climate policy we have lacked for decades. Meanwhile, we are heading for a regulatory train wreck, funds for new technologies are drying up, our competitors are seizing the moment, our old dependencies are getting worse and energy prices are spiking.  Just how big a catastrophe will it take to get our attention?

4. Real Fiscal Reform (Spending and Tax)
We need to fix our broken budget.  Not just the one we carry on our official books, the real one including entitlements.  Sadly this debt ceiling discussion and the trivial and to some extent dubious cuts being proposed won't do the trick...or even begin to address the problem.  And you can't unless we have an honest discussion about tax reform (which means simplifying the code AND increasing revenues from those who can afford to pay more) and real long-term cuts.  Sadly, no one thinks that conversation will actually take place for years...if ever.

3. Remaking the U.S. Economy
The last decade was the first in U.S. history in which we failed to create any net new jobs and the first in which median incomes fell. The rich are getting richer.  The poor are getting poorer.  Companies are booming but the people are hurting.  The bad results didn't just happen due to recession...they happened post-Bush tax cuts and while the economy was humming along in the early 2000s.  Something has changed structurally in the U.S. and around the world.  Our big national challenge is adapting.  Many of the preceding steps address some...but not all of this...and a real strategic vision is needed.

2. Fixing the Housing Market
We started with a housing crisis...and we still have one.  The homes that are the primary assets of most Americans, are their real retirement funds, are a huge engine of tax revenue and of job creation, are falling in value and new ones are not getting built as they once were.  Until we address this, confidence won't return, spending won't rebound, and the world economy will suffer.

1. Jobs, Jobs, Jobs
Lots of the preceding issues are tied to jobs. But the president and the Congress ought to be addressing the jobs deficit as their number one task. That doesn't mean they can't also be addressing housing and competitiveness and deficits. We can keep more than one thought in our heads at a time.  But for the moment, the issue with the U.S. economy is not just growth...it's growth that benefits American citizens. And for the past few weeks, despite nonsense about how somehow this battle is helping the economy, we've been ignoring this.  And in case it comes up, yes, jobs are more important than cutting the deficit for the next couple years and our leaders need to be clear about that...or they will soon be experiencing America's growing unemployment lines first hand.