For reasons difficult to understand, when the creditworthiness of a country is evaluated, only one year’s revenue (GDP) is measured against total debt. It is as if the total of an individual’s debt, from home mortgage, car loans, and student debt, were measured against one year’s income. Obviously, that would be irrational.

1. The larger the role of government in the economy, the more the published figures for GDP growth are overstating improvements in our living standard.

Another change has been the abject failure of leaders to govern as if outcomes matter. Leaders who can’t identify objectives, exercise authority, and get results—who are forever redefining what they are there to do—invite contempt for their office. Institutions struggling to fulfill their core function are taking on vast new tasks at which they hav