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The Deeper Issues in the Shutdown Crisis

10/08/2013 02:48 pm ET | Updated Jan 23, 2014

As the partisan warfare in Washington continues over the government shutdown and looming debt ceiling, it is important to examine some of the deeper issues in this ongoing battle. Whether it is the fight over Obamacare or the deficit or government spending priorities, there is a consistent theme to all of these fights. Ever since the beginning of the Great Recession in 2007, the drumbeat from both Democrats and Republicans has been to "restore jobs to the middle class," or some variation of that theme. Despite their different perspectives and approaches, both political parties express the same goal over and over, which is to protect the standard of living of middle class Americans. The only problem is that this goal is both unrealistic and misleading.

In his recent book When the Money Runs Out, economist Stephen D. King argues that after an extraordinary growth spurt in the 1950's and '60's, and a series of boom and bust cycles at the end of the twentieth century, Western economies, including the United States, have entered a period of extended decline. In the first decade of the twenty-first century, growth in Western economies averaged just 0.9 percent, less than half the rate of the previous two decades and less than a third of the growth rate of the "golden age" of the '50's and '60's. King offers a number of reasons for the decline, some of which have to do with errors by Western governments, but most of which seem to have been beyond the control of political leaders.

So what is the lesson for America? If it is true that we have entered a period of general economic decline, is "protecting the middle class" a realistic goal? Wouldn't it be more sensible to address our current situation rather than be looking in the rearview mirror, pining for the good old days? It is true that optimism is a key component of the American character, but so is common sense. Furthermore, optimism is based on a hopeful but realistic vision of a future that may be different - although not always better - than the past.

The mistake that our political leaders from both parties are making is in promising more than anyone could possibly deliver, and then blaming the other side for our problems. It is misleading for politicians to promise a return to the unusual economic conditions of the past, when they know full well that this is not possible. Of course, politicians tell voters what they want to hear, but at some point, we need a frank national conversation about the situation that we face.

The truth is that both parties are offering sensible solutions to the decline that we are confronted with. The Republicans are correct that we need to squarely address our national debt and government spending. The dollar cannot reign supreme forever, and eventually our creditor nations will put the squeeze on us to clean up our balance sheet. At the same time, the Democrats are correct that we need to strengthen the social safety net for all of our citizens as we face the prospect of economic decline. A nation that does not forcefully address income inequality, injustice and a host of other civic issues does not have much of a future.

The irony in this era of partisan warfare is that on the policy front, the differences between the Democrats and the Republicans are not that great. Democrats generally acknowledge that we need to get our balance sheet under control, while the most Republicans want to preserve important social programs like Medicare and Social Security. In truth, a combination of these policies are exactly what the country needs to confront the economic decline that we are experiencing.

The further irony is that both Democratic and Republican politicians keep repeating the false mantra of protecting the middle class. In fact, the middle class has suffered and will continue to suffer in the future, due largely to economic factors that are beyond the control of our government. It makes no sense for Democrats and Republicans to blame each other for the plight of the middle class, when there is little anyone can do about the general economic decline. Except, of course, to acknowledge that this is the reality of our situation and set about to actively work together to make the best of it.

Japan entered a period of economic stagnation in the 1980's which it has never fully recovered from. While many faulted government policies, King points out in his book that much of the stagnation was a result of factors beyond Japan's control. Through a combination of individual self-sacrifice, social cohesion and a sense that "we're all in this together," the Japanese people have weathered the storm. In fact, when I asked a Japanese friend to compare today's Japan with the go-go period before the 1980's, he replied "Things are better now." What he meant was that despite economic hardships, the nation was more coherent, more caring and perhaps even happier than during economic boom times. While there are vast differences between the American and Japanese experiences, one can hope that in a few years or decades, despite economic hardship, we can also say "Things are better now."