Has America Lost Its Optimism? No. It Has Been Spent.

Has America Lost Its Optimism? No. It Has Been Spent.

August 14, 2014

By: Patrick Hedger - Policy Director, American Encore

Washington Post opinion columnist Dana Milbank wrote a piece in response to the findings of a recent Wall Street Journal/NBC News poll which attempts to rationalize the poll’s starkly depressing results. What the poll found is that American optimism is at an all time low when measured as how Americans feel future generations will fair in comparison to past generations and the current one. The poll found that a whopping 76 percent of respondents believe that their children will have it worse off than they did.  This sentiment is shared uniformly across different racial, gender, age, and ideological groups. All overwhelmingly feel this sense that the American dream is just that—an apparition, nothing more. Unfortunately I don’t doubt the polls findings.  Is a poll really even needed? Can’t we all feel it? There really is this pervasive sense that even as the financial crisis and “Great Recession” become distant memories, their impact on our economy and sense of strength as the “richest and most powerful country in the world” has yet to pass.

That being said, I do take issue with Mr. Milbank’s assessment as to why we are in this era of “meh” feeling. Milbank lays blame pretty squarely on the current state of the political system. Although he doesn’t come right out and say it, he seems to be echoing the complaints of many liberals recently that political gridlock, and the lack of legislation as a result, is why Americans have “lost” their optimism.

To this I say, Americans have not so much lost their optimism about the future, so much as their future has been spent away.

The percieved lack of legislation coming out of Congress is a non-issue. In fact, it would probably be a good thing if it was true. The only thing Congress should be passing is legislation hedging back the laws we already have on the books. There is no dearth of rules and regulations out of Washington for Americans to follow which are presumed to make their lives better.

A recent study by the Competitive Enterprise Institute found that an average of 51 rules were issued by Executive Branch agencies for every law passed by Congress in 2013. In total, 3,659 rules were issued last year. These rules are written into the Federal Register, a unified document of all the rules and regulations Americans are supposed to follow. It’s a pretty complicated document, so it’s generally measured in terms of its page count, which varies year to year as new rules are added and others expire or are repealed. Four out of the five highest page count totals in history have come under the Obama administration. Suffice it to say, whatever is the cause driving our pervasive pessimism, it is certainly not a lack of government edicts trying to solve all of our problems.

Landmark pieces of legislation have never been the logs that fuel the American fire.  In fact, there is a overwhelming evidence to suggest that most of our major problems are caused by government interference itself and that even the most comprehensive legislative remedies just end up making things worse. More and more studies continue to emerge that prove that the Great Depression was a direct result of overcapitalization spurred by “easy money” policies and that entire episode was only exacerbated by the New Deal. History has nearly repeated itself with our latest troubles. Several federal housing policies and fast and loose monetary policy by the Federal Reserve resulted directly in the housing crisis, which triggered the 2008-09 recession. 

Roughly six years and a staggering $9 trillion in new federal debt later, thanks to all of that shovel-ready stimulus spending, we’re largely no better off. The unemployment rate has fallen for all the wrong reasons. It would still be over 10 percent if millions of Americans had not left the labor force. Economic growth has been anemic at best, as annual GDP net growth rates have yet to crack 3 percent since the crisis.

Given the enormous cost of both the Bush and Obama administrations’ response to the crisis, its no wonder why American optimism has all but vanished. The government mortgaged away our children’s tomorrow to bail itself out today… and it didn’t work. Interest rates are at near-zero percent but our interest payment on debt will approach $225 billion this year. By 2019, it’s projected to surpass half-a-trillion annually. When, not if, interest rates adjust to historical levels of 6, 7 or 8 percent or more, interest payments could surpass a trillion dollars annually and continue to climb beyond that. Imagine the equivalent cost of waging all of World War II again paid on an annual basis in debt service alone, before all the other functions of government receive a dime. That is where we’re headed and someone is going to have to pay for all of that, namely the next generation. And the American people know it.

That seems, to me at least, to be a greater cause for concern and pessimism right now than the fact that Democrats and Republicans aren’t playing nice lately, as if they ever have. 

It's Time for an American Encore