NORTH KOREA'S ABILITY and willingness to set off a nuclear device of some sort is being blamed on a failure of American diplomacy. Never mind that Kim Jong Il's survival depends on the continued support of China, or that Russia has consistently refused to help pressure North Korea to end its bid to become a nuclear supplier to the world's jihadists, or that even now the U.N. Security Council refuses to take meaningful action to force North Korea to change course. When it comes to failed diplomacy, there is blame enough to go around.

But when it comes to failed economic policies that produce failed diplomacy, the buck stops in Washington. It is the economic policy of the Bush administration that has hobbled its efforts to veto North Korea's application to join the nuclear club.

Start with fiscal policy. It is indeed true that the Bush tax cuts were key to ending the recession the Republicans inherited from the Clinton administration. And it is also true that some of the tax cuts have proved to be revenue generators for the Treasury. That has enabled the administration to gloat over a 22 percent reduction of the budget deficit from last year's $319 billion. But in a booming economy, a continued deficit of $248 billion is hardly chopped liver, as the analysts in New York's delis say. And when those deficits result in stacks of IOUs held by China, America's diplomats are forced to walk softly, lest they antagonize so large a creditor.

It is this fiscal situation, this unwillingness to rein in spending so that the boom in tax receipts can be used to provide support for American diplomacy, that has made it impossible for America to have an effective foreign policy. Indeed, it is arguable that George W. Bush has presided over the largest decline in America's ability to influence world events since, well, since the 1920s, when we decided it was in the nation's interests to let the world take care of itself while we partied at that era's equivalents of today's discos--the jazz joints and speakeasies that offered solace to the Wall Street crowd after a hard day of share-price manipulation.

North Korea was confident that America would not use force to eliminate its nuclear facilities, or to bring its long-range missile program to a crashing halt, or to stop its massive counterfeiting of $100 bills--counterfeits so good that they are dubbed "superdollars" and can be detected only when they turn up at the Federal Reserve Banks. After all, even that country's cloistered politicians can see that the Bush team is unwilling even to commit the resources needed to bring the Iraq intervention to a successful conclusion, or to prevent the Taliban from retaking large swathes of Afghanistan. Rather than call upon the American people to make some sacrifices, in the form of higher taxes, the president invited them to visit America's malls more often. And if consumers didn't have the cash needed to buy that new flat-screen television set, there was Alan Greenspan, keeping interest rates so low that borrowing was easy and it was irrational to build up equity in your house rather than remortgage it in order to fund current consumption.