In this context, I strongly recommend reading Bill Moyers' recent interview with Andrew Bacevich in its entirety. Money quotes:
ANDREW BACEVICH: Well, we don't live within our means. I mean, the nation doesn't, and increasingly, individual Americans don't. Our saving - the individual savings rate in this country is below zero. The personal debt, national debt, however you want to measure it, as individuals and as a government, and as a nation we assume an endless line of credit.Although the right has been largely successful in hanging the "if it feels good, it must be right" moral albatross around the necks of liberals and the counterculture, Bacevich is absolutely right that it is in fact Reagan who turned that same creed into the core of the conservative economic agenda of tax cuts for the wealthy and huge expenditures on nonproductive assets -- an economic strategy which lies at the heart of the ongoing collapse of our economy. The Bushist GOP merely completed the Reaganite quest to destroy the economy by appealing to America's desire to have its cake and eat it too. In so doing, conservatives have brought our country to defeat and ruin.
As individuals, the line of credit is not endless, that's one of the reasons why we're having this current problem with the housing crisis, and so on. And my view would be that the nation's assumption, that its line of credit is endless, is also going to be shown to be false. And when that day occurs it's going to be a black day, indeed.
BILL MOYERS: Now you go on to say that there was another fateful period between July 1979 and March of 1983. You describe it, in fact, as a pivot of contemporary American history. That includes Jimmy Carter and Ronald Reagan, right?
ANDREW BACEVICH: Well, I would be one of the first to confess that - I think that we have misunderstood and underestimated President Carter. He was the one President of our time who recognized, I think, the challenges awaiting us if we refused to get our house in order.
BILL MOYERS: You're the only author I have read, since I read Jimmy Carter, who gives so much time to the President's speech on July 15th, 1979. Why does that speech speak to you so strongly?
ANDREW BACEVICH: Well, this is the so-called Malaise Speech, even though he never used the word "malaise" in the text to the address. It's a very powerful speech, I think, because President Carter says in that speech, oil, our dependence on oil, poses a looming threat to the country. If we act now, we may be able to fix this problem. If we don't act now, we're headed down a path in which not only will we become increasingly dependent upon foreign oil, but we will have opted for a false model of freedom. A freedom of materialism, a freedom of self-indulgence, a freedom of collective recklessness. And what the President was saying at the time was, we need to think about what we mean by freedom. We need to choose a definition of freedom which is anchored in truth, and the way to manifest that choice, is by addressing our energy problem.
He had a profound understanding of the dilemma facing the country in the post Vietnam period. And of course, he was completely hooted, derided, disregarded.
BILL MOYERS: And he lost the election. You in fact say this speech killed any chance he had of winning reelection. Why? Because the American people didn't want to settle for less?
ANDREW BACEVICH: They absolutely did not. And indeed, the election of 1980 was the great expression of that, because in 1980, we have a candidate, perhaps the most skillful politician of our time, Ronald Reagan, who says that, "Doom-sayers, gloom-sayers, don't listen to them. The country's best days are ahead of us."
BILL MOYERS: Morning in America.
ANDREW BACEVICH: It's Morning in America. And you don't have to sacrifice, you can have more, all we need to do is get government out of the way, and drill more holes for oil, because the President led us to believe the supply of oil was infinite.
BILL MOYERS: You describe Ronald Reagan as the "modern prophet of profligacy. The politician who gave moral sanction to the empire of consumption."
ANDREW BACEVICH: Well, to understand the truth about President Reagan, is to understand why so much of what we imagined to be our politics is misleading and false. He was the guy who came in and said we need to shrink the size of government. Government didn't shrink during the Reagan era, it grew.
He came in and he said we need to reduce the level of federal spending. He didn't reduce it, it went through the roof, and the budget deficits for his time were the greatest they had been since World War Two.
Liberals said all along that the deficits and endless credit would come back to destroy us. Clinton at least managed to re-balance the budget after the excesses of the Reagan-Bush era, but the Bush-Cheney GOP declared the "deficits don't matter" and the conservative jockstrap-intellectuals mocked as timid those who claimed they did. The profligacy and greed of the country, both at a national-strategic level (pursuing needless wars we can't afford and running huge budget and trade deficits) and at a personal level (ranging from the fat cats on Wall Street to the reckless users of negative amortization and NINJA loans), is now the ultimate chicken coming home to roost.
Obama couldn't be more right when he says that the current crisis is an indictment of a generation of conservative, Republican policies. The truth is that the GOP was always about lining the pockets of the fat cats (what is properly called "looting") while using deficit spending, unpaid-for imports, and cheap credit to lull the commoners into thinking that something was actually trickling down to them. The game is up now, and let us hope that conservatives face a generation in the political wilderness.