It is a bittersweet walk down Memory Lane beginning with the happy days following the collapse of the Soviet Union and the fall of the Berlin Wall.  The U.S. was the undisputed leader of the world, our economy was booming, the budgets were balanced, and the dollar really was King Dollar.

In a very short time, we have fallen far.  To his credit, Friedman barely touches the subject of fault and looks to the future.  His analysis is that we have four problems to attack simultaneously, i.e., (1) globalization, (2) changes caused by the IT revolution, (3) chronic deficits, and (4) the consequences of rising energy demand in the face of climate change.  I think Republicans and Democrats would agree on the first three and quibble on the fourth.

He reminds us of what Winston Churchill said to the British people during the depths of World War II, when he said “we have not journeyed across the centuries, across the oceans, across the mountains, across the prairies, because we are made of sugar candy.”

The U.S. clearly has problems to attack, but let’s not forget the “five pillars of our prosperity” that put us on top before and will pull us back to the top again.  They are (1) good public education, (2) infrastructure, (3) immigration, (4) government support, and (5) implementation of necessary regulation on private economic activity.  I suspect the Republican response would be chronic deficits preclude any of the above, and the Democratic response would be to plead for one last gasp of deficit spending.  My response would be the bond vigilantes won’t permit “one last gasp.”  They didn’t hesitate to attack Italy, the world’s eighth largest.

I have immense appreciation for Tom Friedman’s ability to see the trends from 35,000 feet, but we do not live in a rational world.  We cannot fund the pillars of our prosperity before we deal with the heart-breaking problem of entitlements, which Friedman barely touches.

Just as one small example, Medicare spent $55 billion in 2009 paying for the last two months of life.  Was it worth borrowing from the Chinese?  And, which of the five pillars of prosperity would benefit most from $55 billion?  It is a terrible trade-off.

Dealing with the problem of entitlements is indeed heart-breaking!