Everyone was shocked.

What happened, as the facts came to light, wasn’t misfortune. It wasn’t even unique. Just another instance of a man achieving a high level of prosperity and then, over time, his beliefs about his wealth and his ability to spend grew to exceed even his sizeable income. He developed his own sense of entitlement. His own story of manifest destiny. He began working less and spending more time enjoying the fruits. Flaunting his wealth and exercising his power.

He developed a twisted belief that he was somehow anointed to be, and to always remain, the biggest and the richest.

Of course, he wasn’t. Nobody is. No organization. No company. No country.

Success, fortune, economic future and financial solvency are things not determined by ethereal forces such as fate, destiny or anointment. They are governed by more concrete laws. Success and sustained economic prosperity are earned through the dedicated exercise of the virtues of hard work, sacrifice, diligence, frugality, humility, savings and investment.

When a person or people exercise these traits, the result is economic prosperity. Sure, luck can influence the trajectory and timing, but the formula remains unchanged. The inputs yield the outputs.

When a person or a people fail to exercise these traits, the results are economic erosion and collapse.

A simple review of the historical inflows and outflows of our federal government reveals we spent more than we brought in 74 of the past 100 years and a whopping 45 of the past 50. Intake rose almost every year but spending outstripped it. Deficits in good times and bad. Accelerating accumulation of debt. It occurs for a simple reason: the representatives we send to congress approve deficit budgets. They can’t, or won’t, say no to opportunities to spend. It should be a crime.

It is everywhere. A culture of entitlement. Of immediate gratification. Negative savings rates for U.S. households. Compare this to the savings rates of the Chinese people, and China. A culture of sacrifice, hard work, savings and investment. The inputs yield the outputs. Accelerating economic prosperity in China. Like the U.S. in the 1800s and early 1900s.

I remember how Ted Stephens’* friends and family reacted to predictions that he was headed for bankruptcy. Ridicule. Hatred. And of course many logical explanations of why he’d be okay. But none of the rationalizations were as simple as the indisputable law: spend more than you make and you’ll soon go bust.

Ted Stephens went bust.

^{* Ted Stephens is a fictitious name}