Two decades ago, Bill Clinton famously kept himself on message in his successful bid to unseat President George H.W. Bush by repeatedly invoking the phrase: “It’s the economy, stupid.” It was Clinton’s ability to convince voters that he could do a better job than Bush in addressing their economic hopes and fears that propelled him to victory. With voters more nervous than ever about their economic future, you’d think the same mantra applies now. Not exactly, though. The phrase simply doesn’t pack the same punch that it did in 1992.

The reason: whether you’re talking about the United States or Europe, the economic crisis is only part of a much larger angst. What’s on people’s minds is leadership—or, more accurately, the lack of leadership. Current political leaders on both sides of the Atlantic inspire less and less confidence and respect just when they need more of both to confront the daunting economic challenges posed by sluggish growth,  ballooning public debt, the tottering euro and the breathtaking pace of technological changes that can be both exhilarating and frightening.

Barack Obama’s approval ratings continue to be stuck below 50 per cent, while the divided results in Iowa demonstrate that no Republican challenger has captured the imagination of voters, even if New Hampshire nearly anoints Mitt Romney as the party’s nominee. German Chancellor Angela Merkel has come closest to seizing the mantle of leadership in Europe, warning in her New Year’s address that the continent was facing its “harshest test in decades.”  But she is the subject of dismissive comparisons to her towering predecessors like Helmut Kohl and Konrad Adenauer, with Europeans complaining that they have a historic crisis but no leaders of historic stature to meet it.

Merkel and French President Nicholas Sarkozy—or, as some Europeans joke, “Merkozy”—are leading the effort to impose tough new EU budget discipline. This would apply not only to the most troubled economies like Greece, Spain and Italy but also to the other EU members, except for Britain which is increasingly going its own way. But while such steps are clearly merited, there’s a double danger: harsh austerity measures may not go far enough to get public debt under control, but may go too far in stifling growth. Already, there are predictions that Europe will be mired in another recession this year.

Some economists are concluding that the real culprit is the entire push for a common currency. “The euro should now be recognized as an experiment that failed,” Martin Feldstein, Chair of the Council of Economic Advisors under President Reagan, writes in the current issue of Foreign Affairs. While rejecting that verdict, even some of the staunchest advocates of European integration concede that failure is a possibility. Noting that China and the U.S. have a lock on the gold and silver medals when it comes to economic performance, former Polish President Aleksander Kwasniewski warns the EU has to prove it still deserves the bronze. Without major internal reforms, he told Newsweek’s Polish edition, “we’ll fall off the podium.”

The crisis in the United States doesn’t look quite as dramatic, which is both good and bad news. The bad news is that, short of the feeling of impending doom, America’s politicians on both sides of the aisle look all too happy to consider 2012 to be a typical election year, where scoring points against each other trumps any impulse to come up with genuine solutions that require bipartisan cooperation.

Europeans traditionally admired the United States for its can-do spirit. Luigi Barzini, Italy’s elegant essayist, wrote in his 1983 book The Europeans that the continent’s inhabitants were always amazed by American attitudes. While Europeans expect to live with problems, he noted, Americans, by contrast, believe “that all problems not only must be solved, but also they can be solved, and that in fact the main purpose of man’s life is the solution of problems.”

Today Europeans bemoan the paralysis in Washington, wondering why that spirit has disappeared. They accurately point out that the U.S. faces many of the same challenges they do—and seems even less capable of deciding what to do about them. On a per capita basis, U.S. public debt ($33,555 in 2011) is higher than that of Germany ($27,750) and France ($33,083) and is only a bit below that of Italy ($37,313) and even Greece ($34,304).

Of course, debt—whether it’s per capita or as a percentage of GDP, where the U.S. still does better than most European countries—is only one measure of where things stand. And the Europeans are the first to admit that the U. S. still has the economic edge for all sorts of reasons—it’s more dynamic and entrepreneurial, less constrained by bureaucracy, and derives the benefits of continued demographic growth that stands in stark contrast to Europe’s unremitting demographic decline. But they have no confidence that they can look to the U.S. for genuine leadership by example when it comes to solving the big economic problems.

Still, there are grounds for guarded optimism. Because Europeans now recognize they are they are standing at the edge of a precipice, they may finally focus their energies on getting things right—finding a way to control runaway debt while promoting growth. Germany has done well within its borders on that score, but now needs to help others do so. Because Americans are more aware than ever that they now face many of the woes that they once ascribed only to Europe and other distant lands, they may demand more from their politicians in this election year—serious proposals about serious issues in a period when rapid technological changes are redefining everyone’s lives, livelihoods and capabilities. In a variety of new forums, like the Affordable World Security Conference that is scheduled for March in Washington, those discussions are already beginning.

As for the politicians, both the incumbents and those seeking to replace them, they’d do well to begin to engage in those discussions rather than merely scoring points against each other. And to take the lead in the search for new strategies and new solutions. Or, to put it bluntly, they should ponder a new mantra: “It’s leadership, stupid.”

Andrew Nagorski is vice president and director of public policy at the EastWest Institute. He is the author of the forthcoming book Hitlerland: American Eyewitnesses to the Nazi Rise to Power.