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The accumulation of annual deficits is the national debt, and here the widely cited numbers, hair-raising though they are, actually understate what is likely to be the extent of American taxpayers’ obligations. The figures do not take account of the huge and in some cases probably unpayable debts of states and cities. By one estimate, states have $3 trillion in unfunded pension-related obligations. The gaps between what New York, Illinois, and California in particular will owe in the coming years and the taxes their governments can reasonably expect to collect are very large indeed.

Vallejo, California, a city of about 117,000 people, which declared bankruptcy in May 2008, was devoting about 80 percent of its budget to salaries and benefits for its unionized policemen, firefighters, and other public safety officials. Tracy, California, made news when it announced in 2010 that citizens were henceforth being asked to pay for 911 emergency services—$48 per household per year, $36 for low-income households. The fee rises automatically to $300 if the household actually calls 911 and the first responder administers medical treatment. The federal government will surely be called upon to take responsibility for some of these obligations. It will also come under pressure to rescue some of the private pension plans that are essentially bankrupt. And most estimates assume that the country will have to pay only modest interest costs for the borrowing it undertakes to finance its budget deficits. Doubts about the U.S. government’s creditworthiness could, however, raise the interest rates the Treasury Department has to offer in order to find enough purchasers for its securities. This could increase the total debt significantly—depending on how high future interest rates are. In short, our overall fiscal condition is even worse than we think. There is a website that tracks the “Outstanding Public Debt of the United States,” and as of June 15, 2011, the national debt was $14,344,566,636,826.26. (Maybe China will forgive us the 26 cents?)

As for the fourth challenge, the threat of fossil fuels to the planet’s biosphere, it is a direct result of the surge in energy consumption, which, in turn, is a direct result of the growth that has come about through globalization and the adoption (especially in Asia) of free-market economics. If we do not find a new source of abundant, cheap, clean, and reliable energy to power the future of all these “new Americans,” we run the risk of burning up, choking up, heating up, and smoking up our planet far faster than even Al Gore predicted.

This means, however, that the technologies that can supply abundant, cheap, clean, and reliable energy will be the next new global industry. Energy technology—ET—will be the new IT. A country with a thriving ET industry will enjoy energy security, will enhance its own national security, and will contribute to global environmental security. It also will be home to innovative companies, because companies cannot make products greener without inventing smarter materials, smarter software, and smarter designs. It is hard to imagine how America will be able to sustain a rising standard of living if it does not have a leading role in this next great global industry.

What all four of these challenges have in common is that they require a collective response. They are too big to be addressed by one party alone, or by one segment of the public. Each is a national challenge; only the nation as a whole can deal adequately with it. Of course, a successful response in each case depends on individuals doing the right things. Workers must equip themselves with the skills to win the well-paying jobs, and entrepreneurs must create these jobs. Americans must spend less and save more and accept higher taxes. Individuals, firms, and industries must use less fossil fuel. But to produce the appropriate individual behavior in each case, we need to put in place the incentives, regulations, and institutions that will encourage it, and putting them in place is a collective