Six years ago, when the global financial crisis first broke, few realized how close we were to a catastrophic collapse of the world order we'd known for six decades. We escaped anarchy by the skin of our teeth. When the Great Recession exerted its grip, we knew we were in for some hard times. We had been through them before: good times, bad times, and then more good times. Yes, that's how it would be.

But it hasn't worked out that way at all. Where there was hope, there is now despair. Where there was conviction, there is now cynicism. Where there was community, there is now division. We don't feel we are inaugurating a new beginning this month so much as enduring the continuation of what we might reasonably call The Long Misery.

This is partly a matter of economics—that despite the largest fiscal and monetary stimulus in American history, we seem to be caught up in a Japanese-style long-term stagnation, in which many Americans are working harder than ever before to compensate for the drop in their real median income.

But there is more to our present discontent than can be relieved by decimal-point changes in the indices. There is a vacuum at the heart of the country. Polling has shown that huge numbers of Americans are anxious about the future of our nation. They look back on a lost decade of decline and, by a margin of nearly 2 to 1, expect their children's jobs, salaries, and benefits to be inferior to their own. At least a third go so far as to say that America's best days are behind it. Just think: The real median income of Americans today, adjusted for inflation, is lower than it was in the late 1990s.

Meanwhile, those at the top of the pyramid have never had it so good. The United States owns the world's reserve currency. We have most of the best universities. We still account for nearly a quarter of worldwide economic output, and we have easily the best organized, best led, most innovative military force the world has ever known. Yet the confidence that inspired generation after generation to make the difficult decisions and bear the sacrifices has virtually evaporated.

Only 1 in 5 Americans is basically content with our government. No matter which party has the ascendancy, we are burdened by a dysfunctional government. For years we have spent like a big-government country but taxed like a small-government one; as the population ages, our entitlement programs, particularly pensions and healthcare, are gradually bankrupting us. As Harvard's Joseph Nye once noted, the country "lacks the will, not the wallet." Today, the problem of the "wallet" has become as pressing as willpower. Why do we continue to tolerate budgets that underestimate spending while overestimating revenue?

Thus it is that a country long celebrated for optimism amid adversity is having trouble finding the spirit that saw it through past times that were, in fact, much more threatening. The broad sense of unease is due to the fact that we have so mismanaged our finances we have become an "enfeebled" international player. As Henry Kissinger puts it, "The United States cannot afford another decline like that which has characterized the past decade and a half … only self-delusion can keep us from admitting our decline to ourselves."

The Long Misery is marked by a cultural and an economic crisis. Here's one symptom: In the 1990s, California spent twice as much on its universities as on its prisons. Today it spends almost twice as much on prisons as on its universities. We face a significant decline in family cohesion, with about one third of American children being raised by a single parent, a condition that all too often has deleterious effects on their academic achievements, social skills, and character formation. We have many teachers who are unable to meet the challenge of educating our children to the appropriate level. One third of all of our doctoral students are foreigners, yet remarkably, once they earn their advanced degrees we escort them to the border to go and join our biggest competitors. We ignore the benefits of immigrant talent and the experience of Silicon Valley, where over half the science and engineering workforce is foreign-born and where 1 in 4 engineering and technology companies—firms that have generated hundreds of thousands of jobs—have at least one immigrant founder.

Relayed in Ping Fu's new book Bend, Not Break: A Life in Two Worlds is a classic example of how we have got our priorities wrong. In the '80s, when Ping arrived as a young refugee from Mao's Cultural Revolution, she had no money and only three words of English. She worked her way through college, eventually discovered a talent for creating computer software, and cofounded Geomagic, maker of an innovative 3-D system for designing products. Today we lose people like Ping every day.

Other nations understand that knowledge and skills are the new global currency. While we once led the world in the quality of our free public education, today our problems with education are critical and serious. We ignore the fact that an achievement gap exists even before students start first grade. Many refuse to acknowledge that teaching should be a high-skill, high-entry-level profession.

And now, to save taxpayers money, there are those who would cut back on scholarships and student loans, not realizing that in doing so we are "eating our seed corn." Experience shows that education is not a consumable that "costs," but rather a matchless investment that "pays." Everyone wins from a better educated public. Education is more closely correlated with upward mobility than anything else. It's the best way to reduce excessive inequality in incomes and opportunities, and the best way to avoid having our society degenerate into a class system.

Ordinary Americans get it. They understand that we are in the midst of the most predictable crisis in modern history. Who could dispute that, when our government has to borrow almost $4 billion a day just to keep going? Now we are at risk to the point that our national debt is an existential threat. The indifference to this debt crisis was captured by Wimpy, a character in the Popeye cartoon, "I'll gladly pay you Tuesday for a hamburger today."

We guarantee that we'll have to endure more austerity by failing to invest in education and infrastructure; the biblical Joseph's dream of "seven fat years" followed by "seven lean years" may be upon us.

The American public is looking for renewal. We learned much when we had to serve a market stretching vast distances over mountains, deserts, and rivers, and meet the needs of a diverse population. We learned that we could incubate the future in graduate and undergraduate universities and labs and business schools drawing many of the world's best and brightest. We saw the results when talented people entered the private sector, where the successful are rewarded in a nation of doers. And we developed a unique business culture of individualism, entrepreneurialism, pragmatism, and novelty, and a people who are mobile physically and mentally, given to self-help, self-improvement, and self-renovation.

Growing from the grass roots has enabled us to manage ongoing revolutions in technology, information, and logistics and to marry a new economy and technology to an older economic culture. We continue to fund the new and not the old. The notion of American exceptionalism still endures.

What must we do? There are no mysteries here. We simply must invest more in our decaying infrastructure and our education system at all levels. We must re-conceptualize immigration as a recruiting tool. We have a history of national consensus, and in moments of crisis, of finding a leader who fits Harry Truman's definition: "a man who has the ability to get other people to do what they don't want to do and like it."

Alexis de Tocqueville observed that "the greatness of America lies not in being more enlightened than any other nation, but rather in her ability to repair her faults." The issues we face are not about our power and capacity. They are about our will and the quality of our character.