06/15/2010 05:12 am ET Updated May 25, 2011

The Federal Debt - The Boxes We Make

There's a wonderful short animated film called Joshua in the Box. Joshua at first accepts, but then hates, being confined in his little box. He pushes endlessly against its sides to find a way out. All seems hopeless until his outwardly thrust arm, to his amazement and delight, actually pokes through a side of the box. Through this little crack, he peers then squeezes out, with wide grin and the rapture of freedom from the constraints of his small world. Yet within seconds, his smile fades into a grimace. Being outside the box is such unchartered territory, so foreign to his experience, that his new freedom becomes terrifying. Joshua quickly constructs a new box around himself. Being inside a box once again, he may not be happy. But it is at least a world he knows.

Americans, with their collective public debt, may be Joshua in the box. We may not like where we are, but the alternatives seem too painful and unacceptable.

Skyrocketing federal budget deficits and accumulated public debt are triggering alarm bells among the governors and the governed. We are in a box in which we are loath to remain. Thomas Jefferson's warning that "the principle of spending money to be paid by posterity under the name of funding is but swindling futurity on a large scale" seems to have finally caught the public's attention, nearly two hundred years after he sounded the alarm.

Economists as well as wage earners share the perception that things have gotten out of hand. But, as for most of America's problems, diagnosis is easier than prescription. That's both the banner and the bane of our democratic approach to fixing what ails us. As Joshua, we know what we hate, but we're flailing around, not at all sure what the solution is or whether we will hate it more.

In truth, of course, the nation has not been a profligate spender for most of its history. In its first 125 years, the accumulated debt did not go beyond $4 billion, topping that total only when we entered World War I. The debt did not reach $1 trillion until 1982. Yet it now stands at nearly $13 trillion, representing more than eighty percent of GDP, two and a half times the percentage in 1980.

Standing in this financial box, constructed of debt on all sides, we face adopting one or both of two choices: cut spending or raise more revenue. That part of the solution is simple: there are only two ways to balance the books. Yet we seem averse to either.

Americans, to be fair, are - at least in public opinion polls - willing to cut spending - except for those things they believe we must spend money on. Unfortunately, those things include entitlements and national security, which collectively represent nearly eighty percent of the federal budget (and rising). When you add interest on the debt, close to another ten percent of the budget, what exactly is there left to cut? Highway funding? Airline safety? Food and drug inspection? Environmental cleanup? Medical research?

Neither are Americans, for the most part, willing to raise revenue, at least not if that means taxes. In a June 2009 Rasmussen Reports national poll, forty-five percent were willing to cancel the rest of the stimulus spending in the massive $787 billion Recovery Act. In this, at least, we were putting our money where our mouths are - except, of course, only twenty percent were willing to give up the $288 billion of that stimulus package that was tax cuts, the only major conclusion in the poll supported equally by Republicans and Democrats.

America on the road to fiscal solvency looks pretty good, until we actually peek outside the box and see what it means to be there.

This should not be surprising. Since Ronald Reagan pronounced that government is the problem, not the solution, and Congress bifurcated along increasingly ideological and safe-district lines, we have allowed politicians to tell and sell us two stories as a nation. Like the girl who wants to be wooed but not wed, we have accepted both suitors and committed to neither. Democrats have told us we can have the social programs we want, believing that when we got them, we'd see the need to pay with higher taxes. Republicans have told us we can have lower taxes, convinced that when we got them, we'd have to cut programs and spending. Each party has been half right. We have gotten the programs and the tax cuts. And the debt grows. For a long time, that box was OK. It now seems intolerable - but it's been home for a long time.

When Joshua found himself in his new box, his smile returned, briefly. His chosen fate was to accept what earlier angered him. It was strangely comforting. Perhaps he even forgot that he had once escaped the prison in which he found himself only to now make his own prison. But there the movie ends. We will not have the luxury of Joshua's contented, if self-delusional ending. The only future for us - and for our children - lies outside the box, where responsibility and painful choices await in the only world that is truly free.