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In London on Apr. 1, President Barack Obama faced down “fairly broad challenges to American economic leadership”– or, at least, he faced down a question about them posed by a journalist from the Associated Press. “What do you say to the talk,” asked Jennifer Loven, “that there’s a decline in the American model, American predominance?”

Obama’s confident reply has a lot about his outlook on the world and America’s place in it. “I think if you pulled quotes from 10 years ago, 20 years ago, 30 years ago,” he opined, “you might find similar contentions that America was on decline.” But the president asserted that “somehow it hasn’t worked out that way,” and explained that this was “because… there is a vibrancy to our economic model, a durability to our political model, and a set of ideals that has sustained us through even the most difficult times.”

Claims of American economic decline have indeed been legion, and have been made over a long period of time. Such claims are often made in relative terms, with the Soviet Bloc, Japan, and most recently, China serving in succession as the most likely challengers to American economic predominance. Obama is surely right to conclude that the rhetoric of American decline is nothing new.

But was he also right to say that, when it comes to American economic decline, “somehow it hasn’t worked out that way?” I think that he was, but only if, by “worked out,” the president was referring to the short-sighted and selfish way in which American leaders have taught the public to think about their prosperity.

The way Americans have worked things out, decline has been illusory. People who talk about it (who are almost invariably outside the government) either don’t know the facts or hate America. And any Doubting Thomases who wish to see some measure of America’s continued dominance need only look at the wreckage of the Soviet Bloc and Japan strewn by the wayside, and listen carefully for the sound of China huffing and puffing from miles behind in an improbable attempt to, as some commentators put it, catch up.

It’s tempting to believe that this way of looking at the world is the right one. Our economy is still the largest in the world. We make more and spend more on a per person basis than does any other country. However much people complain about our enormous inequalities of income and wealth, our economy still supports a large majority of Americans in lifestyles that would look affluent in many parts of the world. Our shelves are probably the best stocked. When other countries’ leaders want to show how tough they are, they rattle their sabers at the US, paying us and our great power an unintended compliment.

Nevertheless, I think that the worldview that Obama evinced in his answer to Ms. Loven, and that many Americans embrace, is based on a misconception. We base our outlook too much on our massive consumption, and too little on where the money supporting that consumption actually comes from. In contrast to the footrace that is our favorite metaphor for international economic competition, we think of and measure our own affluence and well-being in terms of a kind of cumulative pie-eating contest. Even if all the statements in the preceding paragraph about the US economy are entirely true, we need to be much more circumspect about our relative affluence because of the increasing extent to which it is supported by debt, both public and private, that we owe to foreigners. That our need for foreign money to prop up our affluence is growing greater suggests that our affluence itself is less real– and less permanent– than anyone wants to admit.

The Obama administration has not been circumspect about debt and what it means for our affluence. It has asked Congress to take on an enormous amount of public debt. And the core of the administration’s solution to America’s economic problems is, as Treasury Secretary Timothy Geithner has put it, to “free up capacity for lending” and to “get credit flowing again.”

If Geithner meant facilitating loans that will be invested in America and used to enhance productivity, the administration’s strategy might make sense. But I don’t think those are the kinds of loans Geithner’s moves will facilitate. Whatever his goals, I think that the loans facilitated will often be used for consumption.

And I don’t mean frivolous consumption. Too many Americans now depend on credit to obtain necessities. The loans the administration wants to facilitate won’t generate the money needed to pay them back. They’ll only stave off the day of reckoning when no more loans are forthcoming, because creditors who have extended them in the past to our government, our businesses and organizations, and ourselves as individuals no longer think that we’re worth the risk.

Necessities cost something, and as humans, we should be loathe to withhold from the needy what they need.

At their best, the American “ideals” that Obama referred to in his answer to the reporter work to ensure that human dignity is never destroyed by economic conditions or any other threat to it. But as we hand over money and “get credit flowing,” we should not mistake borrowing more money for affluence, or pretend that the passing circumstance of our access to credit somehow makes for an immunity to economic decline.