All the attention in the current fiscal-discipline struggle focuses on taxes. The Democrats want to raise taxes heavily across the whole economy, mostly so they can stop deficit spending. No one has ever proven that permanent high deficits are economically unsustainable for the US, even if Ken Rogoff thinks history can’t fail to repeat itself — it’s stunning how much three chapters in that one book have changed everyone’s thinking in just the past few months.

But high deficits are politically unsustainable to be sure, and so they threaten the Democrats’ ability to keep running their huge-government project. They really haven’t a good reason to keep that up. There are the stupid people who honestly believe that less freedom is good for America, and there are the corrupt people who know and live the reality that control of a large government is the best kind of power that America offers. (I wish I knew deep in his heart which one Obama is. It’s too facile to say he’s both.)

But bottom line, none of that benefits America as a whole. They’re inherently special interests.

The Republicans aren’t a lot better. They’ve latched on to the idea that the people want lower taxes, and that’s simply all they can talk about. Lower taxes with lower deficits equal lower government spending. This produces more economic freedom and more economic hardship for people at the edge of the economy. The Republicans are talking about cutting spending in intelligent ways, but that’s a wickedly hard problem, and there’s no laboratory for testing out the theories ahead of time. Meanwhile, the ideas (notably the Paul Ryan plan) are complicated because the problem is complicated, and that makes them near-impossible to explain and to sell.

But what really worries me is that we’ve lost something really important. There’s a large subset of the population that is facing a really tough retirement.

By and large, the parents of the Baby Boom generation have made out very well indeed from the current system. Their productive years coincided with a period of massive development and growth in capital, which is strongly correlated with wealth. Wealth is a wonderful thing because it can be consumed later. Having it as an individual means you have lots of choice about how to spend your life, an inestimably valuable thing. Having it as a society means many people enjoy that choice (which after all is another word for freedom), and it also means we as a society can extend that choice to those less fortunate.

But the Boomers are in trouble. (Do they deserve it? Don’t wish on someone else what you wouldn’t want for yourself. Everyone has flaws in other people’s eyes.) They thought the deal was to work hard, invest carefully, and retire in ease. But the hit to asset values (stock market and real estate) that the crash created, falls mainly on them. Their retirement won’t be easy. The Democrat answer of raising taxes on younger people doesn’t work, because it kills the engine of prosperity. And the Republican answer of cutting spending is ridiculous on its face.

Another piece of fantasy that the political debate indulges in is that the economy is going to come roaring back just as soon as the Democrats can get another deficit-spending stimulus (sorry, jobs) bill forced through Congress. But the economy never really recovered after the Internet crash. The decline in US wealth creation is secular, and we’d have to deal with it even if we didn’t have leadership that thinks business is the problem rather than the solution.

We’ve gone through three generations now, operating in the mode invented by FDR, that it’s possible to attain something he called “social security.” That’s the idea that you can arrange your life so you don’t have to depend on anyone when you retire or get sick. Up till that point in human history, such confidence was only accessible to the very wealthy, and it’s remarkable that we attained it across so many people. But the game is up now, and we have to go back to the older model. It’s not humane to pretend otherwise.

I don’t know how this plays out, but I think our society at minimum needs to change back to having enough respect for families and charitable institutions (including religious ones) so we can bring back a social safety net based on blood and community ties, rather than on laws and financial models.

And it was a horrible mistake, one of the worst in history, to elect a president who is so passionately opposed to business. Business channels the forces of creativity and productivity, which are the prerequisites for the wealth creation that make comfortable retirement possible. And that wealth creation needs to be private rather than public. Because public wealth is nothing more than private wealth that’s been confiscated under color of law. Someone needs to start saying this again.

Because the anti-business policies that our leadership are now pursuing are going to kill us as a society. I do absolutely believe and have said many times that the financial industry, which I’ve made a living in, is part of the problem. (That’s a long story.) But the rest of business and industry isn’t getting any help. They’ll muddle through, but not at the high level of productivity we need from them.

And the biggest problem of all is how our children are educated. They’re all learning the old-fashioned Sixties view, formulated best by Howard Zinn, of an American society founded in its soul on injustice and oppression, rather than freedom and shared prosperity. Our children are taught to fight against our society rather than to take a responsible place within it. For them, American history begins (and nearly ends) with the struggles over slavery and women’s rights, not in the colonization of the New World and the revolution against England. This is going to be very difficult to change.

I’m not comfortable positing that the current decline phase is permanent. America can regenerate as a new society, as we have before. But first we need to get past the idea that there are easy fixes, where “easy” means that someone else takes all the pain.