Are we ready for a bankrupt America?
Maybe it's sooner rather than later.
On Tuesday the feds announced that the federal deficit has already surpassed $1 trillion this fiscal year ... and there are still three months to go before its over.
Hard decisions must be made in the coming years on taxes, tax deductions, Social Security qualification and pension obligations. Our political leaders must have the courage to make these tough calls.
This is the third year in a row that the federal debt has crept past $1 trillion annually. The United States' debt is creeping toward the levels that are strangling Greece, Ireland, Hungary and other countries. It won't be long until our debt is at 100 percent of our Gross Domestic Product. In fact, the gross debt is at about 80 percent. The public debt -- owed by us -- is at 60 percent.
These kind of high debt numbers can't be sustained for long periods of times. If that happens, other countries won't want to sustain our debt by buying U.S. Treasuries. Money will get tighter, banks won't lend as freely as they can, and families won't spend money. Unfortunately, the federal commitments to Social Security, Medicare and public pensions are staggering.
If something isn't done to create money to deal with these trillions of dollars in obligations, we will become a bankrupt nation, and many of us will suffer. We may even see riots, such are occurring in Greece today.
The worst part of this pessmistic prognostication is that there exists the real possibility, indeed the probability, that the world we fathers and mothers and mentors leave for our younger generation will be poorer than the world we enjoyed. It's simple logic: you cannot spend outside your means forever without suffering. Every small business owner, or mother and father managing a budget, knows that truism.
The Obama administration has a national debt commission, chaired by Clinton administration official Erskine Bowles and former Republican Sen. Alan Simpson, that is working on solutions to dealing with this debt. On Sunday, Bowles warned leaders that every idea should be on the table. That includes raising the Social Security age eligibility, raising the income bar to qualify for Social Security and Medicare, and even ending the cherished home mortgage tax deduction.
The problem is, most pols are too cowardly to take tough steps because re-election means more to them than avoiding national bankruptcy. If the national debt commission is ever to have any teeth, or hope of meeting its objective, Congress needs to be mandated to have and up and down vote on its recommendations. No tinkering or watering down by scared pols can be tolerated.
We are in a real fiscal crisis. It can't be avoided. It needs to be fixed.
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