Note to Congress: Don't blow this historic chance

FORTUNE -- Dear 112th Congress: Congratulations and so forth, but we don't have time for pleasantries. I'm afraid I have bad news. Do you recall all those charts you've seen showing Medicare costs, Social Security costs, federal interest payments, and the national debt rising steadily for years and then suddenly taking off like a fighter jet? (If not, you can see them in the Treasury's latest Financial Report of the U.S. Government.) Well, the jet's barreling down the runway. Things have been getting fiscally bad for a long time. They're about to get much worse. A new Moody's report says that America could lose its triple-A credit rating on your watch. You've got to decide what to do about it.

Fortunately, what needs doing is perfectly clear. If you want to serve your country -- and your kids, grandkids, and great-grandkids -- here's a three-item to-do list:

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Nothing else you could do approaches the importance of this action. Medicare is overwhelmingly the largest component of future deficits until about 2050, when interest on our swelling national debt becomes an even larger component. You'll need to postpone eligibility for future beneficiaries, means-test them, and stop pretending you can reduce costs through Canute-like decrees to control prices; just look at the bogus mandated cuts in physician fees, which your predecessors triumphantly enacted in 1997 but have overridden every year since 2003 because otherwise too many doctors would stop treating Medicare patients.

It's true that right now is not an easy time to go after Medicare, with the future of Obama's health care reform uncertain. But every year from here on will be an even worse time, because the changes will have to start sooner and will be more frantically resisted. So get going.

Your goal is not to extract more money from taxpayers but to spur economic growth. Everyone agrees that our 3.7-million-word tax code is an abomination that encourages unproductive tax avoidance and burdens our economy with massive compliance costs. The beast has needed slaying for ages. Now, in the space of a few days, the bipartisan debt reduction panel has recommended a total overhaul, and President Obama has said he's ready. Current tax policy is temporary, scheduled to change in two years. This is your best chance.

Don't try to write a code that pulls more of GDP from the private sector into the U.S. Treasury. Even the Treasury's projections acknowledge that getting more than 19% or 20% seems to be impossible. Focus instead on wiping out thousands of deductions, exemptions, and credits, then lowering tax rates. Let businesses and individuals base their economic decisions on economics. What a concept.

The reality of America's future is that we're not going to be the world's largest economy for much longer. China's ascent to the top spot is only a matter of time. That needn't be a problem for us, but it means we can no longer rely on our economy's massive size to attract the planet's smartest, most ambitious dreamers and doers. We need a ton of growth to get us through our current mess, and plenty of prospective immigrants would still love to help. Let's make it easy for them. For starters, adopt venture capitalist John Doerr's proposal: Every noncitizen who earns an advanced degree at a U.S. university should have a green card stapled to his or her diploma.

If doing all that seems like too much, you do have another option: Do nothing. We might be able to muddle through until the next election. But history will remember the situation this Congress faced when it convened, and how it responded. You can be the Congress that ignored reality and played senseless partisan games, or the Congress that turned the nation in a better direction. It's your choice: You can be the Nero Congress -- or you can be the hero Congress.