Four years ago, about 30 percent of Americans owed no federal income taxes. Today, that figure has risen to nearly 50 percent. Meanwhile, 73 percent of all US federal revenues derive from the top 10 percent of wage earners.
The burden of entitlement programs and unfunded liabilities is growing for all high-powered Western economies. With low birthrates, their graying populations will strain the welfare state in the next decade.
Yet the "solution" to this well-known problem has mostly involved debt financing. Only in the past few weeks have countries like Spain begun austerity measures, while the French government is battling union resistance to raise the retirement age.
The absurdity of a heavily indebted nation like Greece turning to other (slightly less) indebted countries to obtain temporary relief is a harbinger of shared economic stress.
The immediate reaction is to find new sources of revenue by increasing taxes and fees, but these taxes squelch business investment, which undermines job growth and the tax base, accelerating a self-propelling cycle of impoverishment.
American weakness could have severe consequences for Europe. After World War II, the transatlantic pact was built on a pledge of America's protection for a Continent that was crawling out of 300 years of brutal conflict.