Charge It, America!

Let's pretend for a moment. Let's say that you run a transit agency in a large urban area. Just for fun, we'll also say that you somehow manage to repeatedly run out of money, despite larger and larger budgets and numerous bailouts by taxpayers.

Now let's pretend that you've run out of money again. (It's the darndest thing, really!) So what do you do? Well, if you're in Illinois, the solution is obvious: higher sales taxes, higher real estate taxes...and...wait for it...

Free rides for seniors!

As you've probably guessed by now, this isn't a game of make believe. A recent Chicago Tribune front-pager featured two grinning oldsters in sweatshirts aboard an El train, with a beaming, toothy, Governor Blagojevich (who, it should be noted, wants "free" public transportation for all in the long run) wedged in between. Yesterday, the Illinois legislature passed the proposed bailout, which doesn't just ensure free transportation for seniors. Taking the taxpayers for a ride is also 100% guaranteed.

It's just another day in credit card nation, and if you're asking where the outrage is, it's probably waiting in line for a government freebie. A quick look around the political arena confirms that bailout policy sells, whether it involves saving poorly planned subprime mortgages, expanding already-stretched entitlements, or throwing out promises for multi-billion dollar government "stimulus packages," many revolving around spending.

Politicians aim to please--and Republican hopefuls are no fools, either, when it comes to satisfying certain customers. Last week, John McCain and Mitt Romney battled for the hearts of Michigan voters by engaging in a quixotic debate: who could best use government to "bring jobs back" and fix the disastrous Detroit auto industry? Somewhere, in the heart of a state crippled by big government, with both candidates floating in the mist of taxpayer-funded "technology investment" and "job training," all sense of irony was lost. The high point came, perhaps, when Romney blasted McCain for stating the obvious: some old automotive jobs are "not coming back." Romney called McCain a "defeatist." Romney, needless to say, won the primary.

The United States of "Charge It!" is not only irony impaired. It's also pretty talented at ignoring news it doesn't want to hear. When the first Baby Boomer filed for Social Security benefits in October of 2007, it kicked off an era of unprecedented stress on a system that is widely predicted, based on any sane financial calculation, to go bust. With our nation's unfunded promises for Social Security, Medicare, and Medicaid reaching the $50 trillion mark, and with the nation's top accountant and Comptroller General, David Walker, asserting that we have a "fiscal cancer," one would think that the issue of entitlement reform would dominate the presidential debates. One would think so, that is, until one realizes the powerful pull of new, more expansive health care systems--that, and detailed analysis of sexy, invented controversies involving gender, class, and strange racial debates regarding the legacy of Martin Luther King Jr. The prevailing attitude of presidential candidates, with the exception, most notably, of Fred Thompson, is simple: "We'll figure it out. Just not now."

The beauty of charging it, of course, is that we can theoretically have it all--something we've been bred to expect in a nation of such incredible prosperity. Can't afford a bigger house? Of course you can. This is America, where economic reality has little to do with expansive promises. The land of the free, in fact, is becoming the home of the debtors. In California, governor Arnold Schwarzenegger has proposed a $14 billion health care plan amid, remarkably, a $14 billion deficit. Where will they get the money? According to Schwarzenegger, with some juggling, it will all work itself out. In the meantime, charge it.

As we move through a brutal January bloodletting in the financial markets, and as tremors in the credit card industry continue to grow (American Express recently forecast $5.9 billion in unpaid loans for the year) it's reasonable to wonder if the game of musical chairs is running towards an end. It very well may be, but it also could be that we will breeze through our momentary troubles, postponing a bigger, more painful payback for another day. The music will eventually stop, in some shape or form. When it does, we'll all be paying.

In the meantime, anyone who says so, especially in the political arena, will be branded a pessimist and a grump. In Illinois, Governor Blagojevich just can't believe the downers who oppose his plan for free rides. "With every good idea comes somebody who's got something to say that ain't so good," he told the press. "It's amazing to me...There are those who have a little less optimism than the rest of us do." Optimism, it turns out, is the magic word of the 2008 campaigns. Romney, winning in Michigan, credited his victory to "optimism." Obama brings voters to tears with his platform of "hope" and "change." The 2008 brand of optimism, of course, is tightly tied to what the government, not the people, can do--and financial warning signs across the board are doing nothing to slow the steady stream of promises tossed out by presidential hopefuls.

Amid the gloom and doom, there is real reason for optimism, and it's this: a minor financial meltdown may just save us from ourselves. It would likely derail grand "Charge it!" plans, defuse harebrained schemes, and force us all to take a good hard look at financial reality. It would also shake out the true optimists (those who believe in the ingenuity of the American people) and pessimists (those who believe people need government to take care of them).

The American public will, in the long run, have to be the adults in the room. Unfortunately, it may take a shock to the system to make that happen. If it does, optimists will make the best of it, without solutions that call for a maxed-out credit card--and as we approach a financial crunch in entitlement spending and economic tremors at home and abroad, that's exactly the kind of optimism we need.