This must have been what it was like living in the 1930s: politicians running around, fingers in their ears, unwilling or unable to confront a rising conflagration that they helped to light.

Back then, the threat came from a revivified and revanchist Germany.  Western leaders stood by while the Germans rearmed, then looked the other way as ever larger chunks of the Continent fell to the blitzkrieg.  When the enervated Western elites finally took a stand over Poland, it was too late -- the fire was so large that, by the time it was finally quenched, the world lay in smoldering ruin.

Today we face a different, though no less mortal, sort of threat: the wealth of the West has been revealed to be largely illusory, built on the foolish foundations of credit that shift and scatter like sands in the wind.  Individuals, governments, and corporations for decades have borrowed against the future, gambling that later economic growth would finance current incredibly high living standards, standards which every good Westerner came to believe their birthright.

It never occurred to these citizens and policy-makers that the economic growth they counted on may never arrive, that their obscene levels of borrowing would themselves be enough to strangle future wealth in its cradle, long before it had a chance to grow.

The reality is this: the total debt portfolio of the United States is conservatively estimated at $130-150 trillion.  And that's just us; add up the red ink of every person, nation, and company on the planet and we're talking many hundreds of trillions.  To put that in perspective, the gross domestic product (GDP) of the whole world was last year a mere $65-70 trillion.

In short, we have been living a "hundred of trillions" lifestyle on "tens of trillions" in actual wealth.  The difference between the two sums is money that would have belonged to the future: future kids would have used it to pay for their education, future inventors to invest in their ideas, future couples to buy their first home.  It is money they will now never have; we have plucked it from their pockets and purses before they were even born.  It's easy, after all, to rob someone who doesn't yet exist.  So that we could pretend to be richer than we are, we have ensured that our children will be poorer than they deserve to be.

This is a monstrous moral failing, a horrendous crime against our heirs.  The difference between ourselves and Bernie Madoff?  Not much, really.  It is the height of hypocrisy to put a man like Madoff behind bars for engaging in the same sorts of financial shell games that we like our politicians to play.  Social Security is every bit as much of a scam as a crooked hedge fund, yet FDR is lionized while Madoff rots in a cell -- nothing could better encapsulate the moral and literal bankruptcy of our civilization.

The consequence of all this debt is easy to predict -- decay, decline, demise.  Such has been the fate of all entities, both public and private, whose commitments have so overwhelmed their resources, and such will be our own fate.  We have murdered our future with a million papercuts; our republic was KIA by IOU.

Watching the eunuchs in Washington squabble over the debt crisis is a sobering experience, in that it makes perfectly clear that our political class is every bit as unequal to the times as was its 1930's counterpart.  I shudder to think how pale and poor are the hands that hold the reigns of state in these times of peril.  Our politicians really haven't the slightest clue what they have wrought, nor the faintest idea of the severity that awaits us. 

Of course, the thing about democracies is they usually get the political class they deserve.  The American voting public proved its utter unworthiness to govern itself when in 2008 it elected an attractive but empty suit to the most consequential office in the world.  He shouted hope.  What for?  We didn't ask.  He promised change.  What kind?  We didn't care.  He looked good on TV, which is really, when you get right down to it, all that matters these days.

I have come to the conclusion that this crisis is so vast that it is effectively beyond the scope of our present institutions to effectively address.  That is because our institutions are part of the problem; indeed, they are the problem.

The old way has brought us to this precipice, and will sooner or later push us over.  Time to start dreaming of a new way. 

Time to start America all over again.

Matt Patterson is a columnist and commentator and a contributor to Proud to Be Right: Voices of the Next Conservative Generation (HarperCollins, 2010).