National Debt

It's high time the United States created a second political party. It's been too long since we had one -- one worthy of the name, anyway. Time was, voters could choose between the big-government Democrats and the small-government Republicans. By degrees, that choice has been whittled away to nothing, at least when it comes to economic matters. We are all aware of the fiscal mess the federal government has created.

A private equity billionaire, a former federal government official and a Baltimore newsletter editor have made a documentary film that they hope can do what an endless parade of policy papers has not: Persuade Americans that debt has created a looming economic crisis that would make the Great Depression look like a market correction. The movie, "I.O.U.S.A.," premiering Aug.

Even before the current financial crisis, a federal budget deficit of nearly $500 billion was projected for next year. Now an additional $700 billion has been committed to bailing out Wall Street, not to mention as much as $200 billion for mortgage giants Fannie Mae and Freddie Mac. So what do our friends in Washington do? They cut taxes to the tune of about $110 billion for everyone from companies that make wooden arrows for kids to Caribbean rum distillers.

There's an old saying attributed to Everett Dirksen, the Illinois senator who dotted his speeches with colorful rants against government borrowing: A billion here, a billion there, and pretty soon you're talking real money. Not these days, you're not. The thicket of figures hurled at Americans since Wall Street began to melt down last month boggles the mind and crashes the calculator. We are utterly numb from numbers. Bailout of the U.S. financial system: $700 billion.

Despite harsh scrutiny from economic analysts, Barack Obama and John McCain remain reluctant to admit what is becoming obvious -- that the nation's economic crisis will take a heavy toll on their ambitious tax and spending plans. On his website, Obama says the nation's debt is a "hidden domestic enemy" that he pledges to combat.

Federal Reserve Chairman Ben S. Bernanke delivered a stern warning to Congress on Thursday to address the national debt, saying spiraling government spending could lead to a "vicious cycle" of even bigger federal budget deficits. "The longer we wait, the more severe, the more draconian, the more difficult the objectives are going to be" in responding to the crisis, he said. "The right time to start was about 10 years ago." Sen. Kent Conrad (D-N.D.

It's become an all-too-familiar ritual: The federal government maxes out the national credit card and the White House, rather than exercise greater fiscal prudence, simply asks Congress for a higher credit limit. This bit of monetary kabuki was played out again last week as Treasury Secretary Henry M. Paulson Jr. told lawmakers that the government would hit its current debt ceiling of $8.96 trillion at the end of the month.

The United States is addicted to oil, President Bush warned Americans last week in his State of the Union address. But what's likely to hurt us more in the long run -- our addiction to oil or our addiction to debt? The oil addiction we share with the rest of the planet. Debt addiction isn't our issue alone among major nations, but as the world's biggest economy our fearless embrace of debt in recent years has created risks that are global in scope. We can cut back on oil consumption.

Worries about the rapid rise in U.S. government and household borrowing in recent years haven't been lost on Bill Gross or Larry Fink, two of the world's biggest bond investors. At a financial conference at UCLA last week, the two men acknowledged that they were uneasy about certain elements of the debt boom, particularly the rising U.S. dependence on foreign creditors. But neither Gross, chief investment officer at Newport Beach-based Pacific Investment Management Co.

Treasury officials told Congress that the government needed to increase the $8.2-trillion national debt by another $781 billion to meet expenses. "During this administration, America's debt, that is the total of the deficits, has increased by $3 trillion," said Sen. Max Baucus of Montana, the top Democrat on the Finance Committee. "That's a 40% increase in the entire federal debt accrued by our country in its entire history." Senate Majority Leader Bill Frist (R-Tenn.