Budget projections show extent of long-term money troubles

Tuesday, February 2, 2010

It's a problem most of us can understand -- not enough income, too many expenses, no self control and the availability of easy credit.

The difference is, the money's not going for a new car or a flat-screen television, it's going to stimulate the economy, conduct two foreign wars, support huge entitlement programs and, oh yes, make the minimum payments on all that outstanding debt.

An individual household may be able to bite the bullet, pay off bills, quit spending and dig itself out of a financial hole -- or, if worse comes to worst, declare bankruptcy and start over.

Digging our nation out of the hole we're in will be orders of magnitude more difficult, with consequences equally profound.

President Obama's budget, which many economists see as overly optimistic, calls for a projected deficit in the coming year of nearly 11 percent of the country's entire economic output.

We've spent that much before, but it was during events like the Civil War, World War I and World War II and we knew it was a short-term condition.

The same goes for the current budget, but unlike earlier times, it is expected to climb back to 5 percent of gross domestic product 10 years from now.

The problem, as Lawrence H. Summers, the president's chief economic adviser, said before he took his current job, is "How long can the world's biggest borrower remain the world's biggest power?"

The implied answer, of course, is: Not long.

How much clout do we carry with the totalitarian leadership of China when it has lent us most of the money that keeps our government in operation?

How long until Teddy Roosevelt's admonition to "speak softly and carry a big stick" is reduced to just the former?

How will we be able to help devastated neighbors like Haiti, for example, if we no longer have the financial resources to take care of our own crises, say, perhaps, the long-expected major California earthquake?

Like a thin household budget that is broken by an illness or major car expense, the national budget is already stretched beyond the breaking point.

Neither the Republican nor Democratic parties have shown the inspired, responsible leadership it will take balance our national checkbook and start chipping away at our massive debt.

It will take real sacrifice over several generations to put our nation back on a solid financial footing.

Are we up to it? Can anyone provide the leadership to do so?

Our nation's future depends on the answers.

Respond to this story

Posting a comment requires free registration: