Many people assume that we can spend money we don't have today because we will just earn more tomorrow. This is especially true on capitol hill, but you can see the assumption pretty much everywhere. Thiel's is basically pointing out that this assumption may no longer be true. Without technological progress, tomorrow won't be better than today.

If a society borrows from the future in times of growth, the additional prosperity will cover the debt payments and nobody really suffers. If society borrows from the future in times of stagnation or decline, however, both the debt payments and the cost of living now come from the same fixed income, so the quality of life suffers. This not only applies to financial debt, but to infrastructure, educational, and other kinds of non-monetary debt.

In other words, Theil's piece is a warning that we need to get our act together. We re-start the technological growth engine, stop borrowing from the future, or tighten our belts and prepare for a general decline in our standard of living. We may not be at the tipping point yet, but it is coming if we don't change course.