Taking The National Debt Seriously -- A Commentary

From The Wall Street Journal:

In 2009 about 40% of income taxes will go towards debt interest payments.

If you think those town hall meetings over health care were fierce, wait until Americans come to understand the threat to our national financial survival posed by the interest on the government's credit card.

When the government spends more than its revenue, there is a budget deficit. These deficits are paid for by Washington selling interest bearing Treasury securities. If the government were ever to default on its promise to pay periodic interest payments or to repay the debt at maturity, the United States economy would plunge into a level of chaos that would make the Lehman bankruptcy look like a nonevent.

Read more ....

My Comment: When the financial crunch hit the U.S. in the 1970s, the first thing that President Carter and Congress did was to cut the defense budget. I expect the same thing to happen in the next few years .... Afghan war or not.

This is unfortunate, but it is only the symptom of a far more serious problem.

The most important strategic asset for the American people (in my lifetime) has been the value and worth of its currency and the support structures behind it (i.e. U.S. financial/government institutions). However, its mismanagement has always been its Achilles heel .... and unfortunately for us the chickens are now coming home to roost. Trillion dollar deficits have consequences .... for the U.S. it will not only be its economic viability, but also its role in helping to maintain world peace and stability.