On Sept. 10, 2001, we were the most powerful, most prosperous and most influential nation in history.

After a decade-long economic boom, the U.S. enjoyed an extraordinary measure of prosperity. Fiscal discipline had transformed our seemingly intractable federal budget deficit into an annual surplus, with large surpluses projected out into the future. The dollar was the currency of choice around the globe, and American ideas and American ideals were ascendant everywhere. Surely no nation so powerful had ever been at the same time so widely admired, its power seen as more legitimate.

Today we are less secure, less prosperous and much less admired than we were two years ago. But it was not what happened to us on Sept. 11 that made the difference. It was what we have done to ourselves since.

We were right to respond with force in toppling the Taliban regime in Afghanistan. Intervention was warranted under international law and legitimated by the UN Security Council, and it succeeded in disrupting the terrorist network behind the 9/11 attacks. But then the Bush Administration badly overreached.

As a measure in the war on terror, the adventure in Iraq was exceedingly unwise. Iraq is a greater terrorist threat today than it was two years ago. Then, its weapons (including its weapons of mass destruction, if there were any) were controlled by a dictator with more to fear from Islamic extremists than we. Now, there are daily terrorist attacks on Americans, UN officials, humanitarian workers and Iraqi civilians, and weapons once under control are almost surely finding their way into the wrong hands. Meanwhile, the Taliban are regrouping in Afghanistan, the Israeli-Palestinian conflict is spinning out of control, the Korean crisis remains unresolved and our military forces are stretched far too thin around the globe.

What of the economy? Clearly we are not better off today than we were two years ago. We have gone from a budget surplus of more than $200 billion a year to record deficits of $400 to $500 billion a year. In fairness, Bush can't be blamed for all of this: an economic correction after the bubble of the Clinton years was probably inevitable. But it is hard to overstate just how reckless and profligate this administration has been with the federal budget. This week the president asked for an additional $87 billion for the coming year for the war in Iraq, and that is likely an understatement. And the administration has given even more money away in tax breaks that have little to do with economic stimulus and much to do with redistributing wealth to the wealthy.

But perhaps the greatest cost has been to our good name in the world. By our words and our deeds, we have disappointed our friends and enraged our enemies. We have demonstrated disdain for the United Nations, contempt for international law, derision for our allies and disregard for world public opinion. Had we been right about the threat posed by Iraq, the world might have come back to us, but it is now evident that the war was sold on what was at best flimsy grounds.

In retrospect, Sept. 11 was, for all its horror, also a moment of extraordinary opportunity. It was a moment when a president might have reassured the nation of our fundamental security and led a united global effort to address the real threats posed by international terrorist networks, might have recognized the importance of maintaining the fiscal discipline that had served America so well in the decade of the 90s, might have seized the day to reform and reinvigorate international institutions consistent with America's interests and ideals, as an earlier generation had done so wisely in the moment of triumph after World War II.

But it was not to be.