MICHAEL BARONE: Government looks to past, free enterprise to future.

Decision makers have responded as if they were facing liquidity crises (we don’t have enough cash to pay off debts immediately) instead of solvency crises (we will never be able to pay off these debts). Too often pain has not been prevented, but just postponed — and prolonged.

In retrospect much of the pain could not be avoided. As economist Tyler Cowen has put it, we were not as rich as we thought we were. Housing bubble prices did not turn out to be real wealth, unless you sold out at the peak and moved to a cave.

Trying to put everyone back in the position they once thought they were in simply won’t work. But it does sound attractive politically. People can remember what life was like in the past.

We don’t, however, know what it will be like in the future. Republicans want less government spending and more leeway for entrepreneurs to create new businesses and jobs. No one knows what innovative products and services will emerge.

That’s the beauty of free enterprise, but it also makes it a hard sell politically. Unless voters have figured out no amount of government spending is going to restore the old status quo.

Well, if they haven’t figured it out, they will. But the longer it takes them, the more damage will be done.