From council rooms in small towns to the marble corridors of Capitol Hill, Americans are rightly focusing on ways to halt the tide of red ink.

Facing huge budget shortfalls, states like California and New York are considering radical cuts to balance their books. President Obama acknowledged the seriousness of the problem in his State of the Union message, calling it a "mountain" that could bury us and urging a five-year partial budget freeze. The president is right to admonish us about the magnitude of the problem that he helped mightily to exacerbate. Political leaders who are serious about fiscal discipline deserve some credit for finally acting to correct course.

But even the most aggressive measures to reform federal spending won't address the underlying cause of our public debt.

That's because the deficit that matters most is not denominated in dollars at all. Its currency is of the heart and mind. It's a manifestation of the values with which we circumscribe our actions, our purposes, and our values. I speak of a deficit of character, which arguably is the root of all of our major economic and social troubles today.

Your character is not defined by what you say you believe. It's defined by the choices you make. History painfully records that when a people allow their personal character to dissipate, they become putty in the hands of tyrants and demagogues. Such tyranny often takes the form of actual rulers, but it can also involve the serfdom of our nobler nature to a lord of lustful impulse. Decadence can destroy democracy as surely as dictatorship.

Among the traits that define strong character are honesty, humility, responsibility, self-discipline, courage, self-reliance, and long-term thinking. A free society is not possible without these traits in widespread practice.

How we subtract from our character

When a person spurns his conscience and fails to do what he knows is right, he subtracts from his character. When he evades his responsibilities, foists his problems and burdens on others, or fails to exert self-discipline; when he allows or encourages wrongdoing on any scale; when he attempts to reform the world without reforming himself first; when he obligates the yet-unborn to pay his current bills for him; when he expects politicians to solve problems that are properly his own business alone; he subtracts from his character – and drags the rest of us down, too.

Mountainous debts, unconscionable deficits, irresponsible bailouts, and reckless spending: These are all economic problems because they sprang first from character problems.

Reform starts with recognition. Not the easy kind that points out flaws in others, but the hard kind that reflects on, then roots out, errors in ourselves.

Is it wrong to take a dollar from the responsible and give it to the irresponsible? Of course it is, which is why so many of us decry the billion-dollar bailouts given to reckless but politically well-connected government agencies and private firms. Yet how many of us accepted taxpayer-funded aid when we fell behind on mortgage payments for homes we never should have bought?

We would express outrage at parents who, after borrowing heavily to buy gadgets and expensive meals, canceled their children's preschool when the bills came due. So why do we cheer for government "stimulus" that will similarly hurt our children? What is it about doing these things a trillion times over that makes it right?

Once upon a time in America, most citizens expected government to keep the peace and otherwise leave them alone. We built a vibrant, self-reliant, entrepreneurial culture with strong families and solid values.

Somewhere along the way, we lost our moral compass. Like the Roman republic that rose on integrity and collapsed in turpitude, we thought the "bread and circuses" the government could provide us would buy us comfort and security. We have acted as if we really don't want to be free and responsible citizens, so we get less responsibility from our leaders and less freedom for us.

The good news is that Washington's profligacy sometimes shocks us into sobriety.

In 1890, American voters raged against the Republican-dominated House of Representatives for its lavish spending. They punished the "Billion Dollar Congress," cutting the GOP roster in the House by more than 90 seats. A similar backlash occurred this past fall, when Republicans gained 63 seats after Democrats (with some GOP complicity) spent hundreds of billions of dollars we didn't have.

In both cases, voters seemed mindful of Thomas Jefferson's warning: "We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude."

Heeding that exhortation takes more than punishing spendthrift incumbents in Congress once in a while. Our federal government is ultimately a reflection of our self-government, so Americans who are serious about fixing the country's fiscal mess must begin by fixing their own character.

Resolutions for reform

These resolutions make a good starting point:

•I pledge myself to a lifetime of self-improvement so I can be the model of integrity that friends, family, and acquaintances will want to emulate.

•I resolve to keep my hands in my own pockets, to leave others alone unless they threaten me harm, to take responsibility for my own actions and decisions, and to impose no burdens on others that stem from my own poor judgments.

•I resolve to show the utmost reverence and respect for the lives, property, and rights of my fellow citizens. I will remember that government money is really my neighbors' money, so I will not vote to loot them. I will stand on my own two feet, behave like an adult in a free and civil society, and expect the same of my children.

•If I need help, I will ask my family, friends, faith network, neighbors, local charities, or even strangers first – and government last.

•If I have a "good idea," I resolve to elicit support for it through peaceful persuasion, not the force of government. I will not ask politicians to foist it on others because I think it's good for them.

•I resolve to help others who genuinely need it by involving myself directly or by supporting those who are providing assistance through charitable institutions. I will not complain about a problem and then insist that government tinker with it at twice the cost and half the effectiveness.

•Finally, I resolve that the highest authority in which I place my strongest faith will not be the United States Congress.

Lawrence W. Reed, an economist and historian, is president of the Foundation for Economic Education.