Last night, President Barack Obama and U.S. congressional leaders failed to reach agreement on a deal to raise the nation’s debt limit. Meanwhile, it has been more than 800 days since the U.S. Senate passed a budget, liberals in Washington are pushing for higher taxes, unemployment is soaring, the deficit keeps growing, and America is careening toward an economic future as the Europe of the West.

That’s a future of crippling debt, spending, and permanently high unemployment that some in Congress are trying to avoid. On Saturday, Speaker of the House John Boehner (R–OH) pulled the plug on a debt ceiling increase that would have raised taxes in exchange for reductions in spending. It was the right move. Tax increases are the last thing America needs as it struggles with 9.2 percent unemployment and stagnant job growth.

But America’s dismal economic reality–and the policy of taxing and spending–are facts of life the Obama Administration would like America to accept, along with their explanation of why growth has been so slow to date.

On yesterday’s Meet the Press, Treasury Secretary Timothy Geithner insisted that tax increases are necessary (though he used the code words “raising revenues”) and trotted out a long list of reasons why recovery has been so slow, including high gas prices, terrible weather, local governments making cutbacks, and the Japanese earthquake. What’s more, Geithner said that the President is “being too hard on himself” over America’s frustration with the economy and said that “we don’t have the ability, because of the overhang in housing and the problems in the financial system, to do—to engineer artificially . . . a stronger recovery.”

In other words, “It’s not our fault, don’t blame us, and get used to it.” The Heritage Foundation’s Mike Franc says that the White House’s defeatist tone likely will likely fall on deaf ears as Americans demand a future of growth, not decline:

It’s a message of resignation. Yes, it says, we’re doomed for economic decline no matter what, but trust us to manage it more gracefully than anyone else.

But Americans will likely stand athwart such defeatism and say “Stop!” There is no need, they will say, to tolerate European levels of unemployment. It’s an increasingly easy sell: Jettison the President’s European-style economic policies, and you jettison European-style unemployment.

The reality is that Americans need not resign themselves to the future that the White House would have them embrace. Flawed policies are holding back the U.S. economy, and there is room to grow if the government gets out of the way. As Heritage’s Bill Beach explains that, “Based on our talents, resources, and capital structure, the economy should be growing now at 4—5 percent. That growth rate would produce over 250,000 jobs per month…enough to reduce the unemployment rate.” But because of big government policies, we’re not realizing those gains.

Washington can start on the path toward liberating that entrepreneurial capacity by making the right decisions on the debt limit. Higher taxes aren’t the right direction; cutting spending is.

Heritage’s James Sherk and Rea Hederman write that “Creating a hostile or favorable business climate is a policy choice . . . The tax and regulatory burden is a policy choice made by the government. If America creates a French-style social welfare state that erects barriers to entrepreneurship, then America will also get French levels of unemployment.”

America doesn’t have to be France. It doesn’t have to carry a European-style debt and tax burden. But the White House and congressional leaders must choose to enact policies that reject a European-style future.

Quick Hits:

  • The United States will withhold more than one-third of the $2 billion in annual aid to Pakistan’s military following the country’s reduced level of cooperation with the U.S. in recent months.
  • The unemployment rate for veterans who served at any time since September 2001 was 13.3 percent in June, up from 12.1 percent in May.
  • Former First Lady Betty Ford will be laid to rest beside her husband, former President Gerald Ford, on the grounds of the Gerald R. Ford Museum in Grand Rapids, Mich., on Thursday.
  • European Union President Herman Van Rompuy and top EU policy makers will meet today to discuss a second bailout for Greece. Concerns are growing over private-sector involvement in the deal.
  • Do you know the five ways that President Obama tanked the economy? Find out on