We're about to mark another national birthday. But we don't seem to be in the mood to celebrate. Polls show 80 percent of Americans think the country's on the "wrong track."

Fortunately, we're not the first generation to face problems -- and surmount them.

Consider the Founding Fathers, who fought for freedom from Britain. Many of these same men drafted our Constitution, the brilliant document that has provided the framework of our republic for more than 200 years.

It's easy to assume they knew their experiment would succeed. But as historian David McCullough points out, that's not true. History wasn't exactly on their side. They didn't know how things would turn out, just that they were taking the right steps.

Taxation without representation was unfair, so they declared independence. Their first stab at a federal government didn't work, so they drafted the Constitution. They took risks, and we've reaped the rewards -- freedom and prosperity.

Today's Americans have plenty of reasons to feel pessimistic. Gas prices are soaring. Foreclosures are up. The value of the dollar is down.

There are long-term challenges, too. If left unchanged, entitlements (Social Security, Medicare and Medicaid) will bankrupt our treasury within a generation. We need to cut spending, boost savings and strengthen our currency. Internationally, meanwhile, we must win the war in Iraq and defeat al Qaeda.

Together it all seems difficult, maybe even impossible. Like the Founders, we don't know how it's going to turn out. However, there's no reason for pessimism.

Contrary to public opinion, there are many ways in which we're pointing in the right direction. In 2006, for instance, Iraq looked like it could be a complete failure. Last April, Senate Majority Leader Harry Reid even declared "the war is lost." That was before the "surge," Gen. David Petraeus' new approach, took hold.

The war isn't over, but Iraq is becoming safer -- for Americans and Iraqis alike. There were 19 U.S. service members killed in Iraq in May, the lowest monthly toll since the war started. That's quite an improvement from May 2007, when 125 Americans were killed.

Iraqis are taking more responsibility for their security, too. In late June the U.S. military handed control of Anbar province over to the Iraqi government. "We have been dreaming of this event since 2003," the region's governor said.

The handover "does not mean al Qaeda is defeated," Marine Major-General John Kelly warned. "What it represents is the improving capability of Iraqi security forces to deal with the threat." As those forces improve, so will the security situation in Iraq -- along with our chances of stamping out al Qaeda.

On the home front, the entitlement crisis is more problematic. In a perfect world, the presidential candidates would lay out detailed plans to make Social Security, Medicaid and Medicare affordable for the long term. Maybe one or both of the leading contenders will still do so.

What we do know is that the American economy is sound. Unemployment remains low, close to what it was in the late 1990s. We've created hundreds of thousands of good-paying jobs in the last five years. The 2001 and 2003 tax cuts reduced tax rates and boosted federal revenues.

Starting from that solid base, Americans will address our entitlement problems. Targeting benefits to those who need them the most would be a good start. Fixing the broken budget process would create the right dynamics to allow -- even force -- Congress to act.

But however we end up approaching entitlements, we ought to do so with confidence. For generations, Americans have always managed to solve problems and create a better country for their children and grandchildren. There's no reason we can't do the same thing.

This Fourth of July, let's remember our country's successful past -- and remind ourselves our success was never guaranteed. The only way we can truly be on the "wrong track" is when we lose faith in our ability to build a brighter future.

Ed Feulner is president of The Heritage Foundation (heritage.org).