Connoisseurs of democratic decadence can savor a variety of contemporary dystopias. Because familiarity breeds banality, Greece has become a boring horror. Japan, however, in its second generation of stagnation, is fascinating. Once, Japan bestrode the world. Now the Japanese buy more diapers for adults than for infants.
America has its lowest birthrate since at least 1920; family formation and workforce participation have declined in tandem. But it has an energy surplus, the government-produced overhang of housing inventory is shrinking, and the average age of Americans' cars is an astonishing 10.8 years. Such promising indicators, however, mask democratic decadence, as explained by the Hudson Institute's Christopher DeMuth in the Weekly Standard.
Deficit spending once was largely for investments - in infrastructure, war - that benefited future generations, so borrowing appropriately shared the burden with those generations. Now, borrowing burdens future generations to finance current consumption. This, says DeMuth, erases "the distinction between investing for the future and borrowing from the future."
Most Americans will be spared the experience of fiscal cliff-related tax increases and spending cuts, which would have been a small but instructive taste of the real costs of the entitlement state.
There will be no significant spending restraint. Democrats even rejected a more accurate measurement of the cost of living that would slightly slow increases in government benefits. Accuracy will be sacrificed to government growth.
President Obama has (as Winston Churchill said of an adversary) "the gift of compressing the largest amount of words into the smallest amount of thought." His incessant talking swaddles one wee idea - raising taxes on "millionaires and billionaires." He has nothing to say about the worsening fiscal imbalance that will make sluggish growth normal.
One winner was George W. Bush, because a large majority of Democrats favored making a large majority of his tax cuts permanent. December's rancor disguised bipartisan agreement: Both parties flinched from cliff-related tax increases and spending decreases. But neither would have tamed the current $1 trillion-plus budget deficit or the 87-times-larger unfunded liabilities of the entitlement state.
This state cannot be funded by taxing "the rich." Or even middle-class earnings. Income taxes cannot fund the government that liberals want, and they dare not seek the consumption and energy taxes their entitlement architecture requires. Hence, although Republicans are complicit, Democrats are ardent in embracing decadent democracy. This consists not just of refusing to will the means for the ends one has willed, but of willing an immoral means: conscripting the wealth of future generations.
As economists Glenn Hubbard and Tim Kane explain in National Affairs, America's political system "cannot govern the entitlement state" that "exists largely to provide material benefits to individuals." Piling up unsustainable entitlement promises - particularly through Medicare and Social Security - has been improvident for the nation but rational for the political class. The promised expenditures would come due "beyond the horizon of political consequences." "Our politicians," say Hubbard and Kane, "are acting rationally," but "politically rational behavior is now fiscally perverse."
But the perils of the entitlement state are no longer "beyond the politicians' career horizons." Furthermore, a critical mass of Republicans reject the careerists' understanding of "politically rational" behavior. The media say the tea party is exhausted. Scores of House Republicans and several senators will soon - hello, debt ceiling - prove otherwise.