Reversing Our Economic Decay: Give Government the Money to Fix It : Politics: We must redefine what we expect from one another and what help our government is expected to provide those in need.

There has been too little criticism of the government’s gradual abandonment of our economic support system. By 1990, federal spending on non-military research and development, physical infrastructure and education was a smaller percentage of gross national product than in 1970.

Put another way, our economy has sagged because we have not attended to its upkeep; we have not maintained the flow of highly trained students and workers, research investment and new construction that powers an economy. Can we believe that this failure to invest in our own future is unrelated to the declining competitiveness of our industries?

If we simply cut the federal deficit or balanced the budget, as many have suggested, yet allow the decline of schools and roads to continue, then we will have not improved the competitive prospects of the U.S. economy or the opportunities of Americans who, through lack of choice or mobility, are tied to its pendulum.

Every American who is unable to produce represents a job lost. We have some understanding of how damaging this is to the affected individual. But we do not yet fully grasp the difficulty that the accelerating accumulation of damaged and disconnected individuals poses for our collective good--in relations among Americans and in a potential decline in our standard of living.

Central to America’s social compact is the idea that certain basic rights can be enjoyed by all. What these rights are, and the number of Americans eligible to exercise them, have expanded over time, reflecting an enlargement in our shared conception of life, liberty and the pursuit of happiness.

Talk of a social compact has an abstract and quaint ring to it, which only serves to underscore how far our society has drifted from a shared sense of obligations. The time has come to define anew what we expect from one another and what help our government is expected to provide those who need such assistance.

This will be a wrenching debate, but one we must have. If a man or woman wants a job, can we ensure that a job is available? Would we rather pay the mounting price of welfare, criminality, wasted talent and widespread family and neighborhood instability than foot the bill for a national system of government-supported public-service jobs? Can we convert schools that don’t work into schools that do? And in the cases where that doesn’t succeed, can we create a mechanism to allow communities to start new schools and close down the failures?

Where will we get the money?

There is a peace dividend to be captured and invested in American society as a result of the end of the Cold War. With roughly half our $300 billion in military spending committed to fight a massive ground war against the former Eastern Bloc, we should be able to agree that real money will be available for domestic investment.

Beyond that, we will need to consider taxes. A stiff tax on oil imports, or on all petroleum products, would set a floor on prices that would assure economy of use and spur measures to enhance efficiency. A $10-a-barrel tax on domestic and imported oil would raise some $40 billion.

A harder measure, but one that ought to be considered as part of a program of domestic investment, is a tax on consumption. A national sales tax would have to be structured so that working-class Americans were fairly treated. The Congressional Budget Office estimates that a national sales tax, with exclusions for a range of expenses--home building, medical care and food, to name a few--would raise $20 billion for each 1% of tax.

Calling for more taxes is certainly an unpopular thing to do, even for a people taxed less than our industrial allies.

Government is not always right, and it has not always been thrifty. But government is the instrument of our will, the protector of our interests and the arbiter between the strong and the weak. We need a government with the wherewithal, including the revenues, to discharge these functions.

What we are now able to see, as a result of the end of the Cold War, is that our national vulnerability extends well beyond the reach of military security. Our failure to invest in the productive capacity of our people--all our people--has been a kind of unilateral disarmament, leaving the United States enfeebled before an international economic challenge. Others have invested; we have consumed.

At other times in our history, we have taken the long view of our needs as a society and made the strategic decision to invest in them. It took eight years to complete the Erie Canal. We spent $12 billion to educate nearly eight million returning soldiers under the GI Bill. This and much more was done in pursuit of a national interest unconnected to a foreign threat.

We must again turn to improving the prospects of the United States. The hard work of restoring our productive capacity will require great investment and a long-term commitment of the kind that has been rare in recent U.S. history. To start will require an acknowledgment of what we have not done and of how, through shortsightedness and disdain for our responsibilities, we have wasted many of the resources we need.

A decade of investment in education, jobs, productivity and reconstruction may seem prosaic. But it is precisely the meat-and-potatoes aspect of this task that we must recognize in order to accomplish it. We must build where we have permitted decay, repay where we have borrowed, and save and invest where we have wasted.

If we cannot begin to do these things, we will break trust with the one group about whom we care more than ourselves--the children of America.