Paul Ryan writes for the Wall Street Journal about a task American policymakers need to address sooner rather than later.
Before Western democracies can face down external threats, they have to muster the will to tackle their major internal challenges.
U.S. fiscal policy is on a collision course with monetary policy. The economic devastation resulting from a debt and currency crisis could inflict enormous—possibly irreparable—damage. Predicting precisely when a huge debt and high deficits will unleash economic disaster is difficult. The dollar’s status as the world’s reserve currency gives the U.S. unique advantages, but no country can defy the laws of economic gravity forever. The U.S. has run up large budget deficits and debts before, but those moments of national emergency, such as world wars or global financial crises, were usually—at least until recently—followed by periods of fiscal repair.
The difference now is that various factors—demographics, health, inflation, declining labor-force growth and declining productivity—have built in an unsustainable rise in the national debt. The federal government is making promises to citizens that it can’t keep. The social contract to help the neediest is at risk, as is the implicit promise of the American dream—that each generation will have the chance to do better than the previous one.
The bad news is that our politics are fundamentally unserious. The good news is that a fiscal crisis is still avoidable. But the window of opportunity to prevent it is closing.
We are not powerless. Holding off catastrophe is a matter of summoning the will. …
… By harnessing new technologies, such as digital wallets with programmable benefits, we can advance a social safety net that encourages family and work. By reinvigorating federalism and strengthening civil society, we can rebuild communities. With a modernized tax code wired for growth, we can make American businesses more competitive, raise living standards, and foster both economic growth and responsible environmental stewardship.