Nation on the Brink of Financial Disaster

In the next 30 seconds, this nation will add more than $1 million to our debt. By day's end, the United States will owe another $2.88 billion.

And the mountain continues to rise, minute by minute, day by day, year after year — to the point where the nation now is in the red by more than $13 trillion (and that's not counting Social Security or Medicare liabilities).

The key issue driving this year's elections is the still-weak economy, but concerns about the surging national debt also weigh on Americans' minds, from Washington, D.C., to Washington, Ind.

A bipartisan consensus is growing that the federal government must confront its addiction to debt as soon as possible or risk an economic meltdown that would severely punish the vast majority of Americans.

Secretary of State Hillary Clinton recently suggested that the debt has become a national security issue, threatening to constrain the United States' ability to respond to international threats. Indiana's Sen. Richard Lugar, ranking Republican on the Senate Foreign Relations Committee, agreed with that assessment in a meeting with The Indianapolis Star's Editorial Board on Friday. He noted that it's particularly difficult to confront China on trade and human rights abuses because that nation holds so much of the U.S. debt.

Political candidates from both parties have vowed to finally take on the problem if elected this fall. But it will be a daunting task no matter who is victorious in November.

As The Star's Maureen Groppe documented in a series of stories last week, stock political answers — cut wasteful spending, end earmarks, tax the rich, bring the troops home — won't be enough to dramatically reduce the federal deficit and bring the accumulated debt back into a healthy proportion in relation to gross domestic product.

Instead, Americans will have to accept that some pain is necessary now to avoid much worse difficulties in the future.

That pain likely will include an increase in the retirement age and reductions in Social Security and Medicare benefits for younger workers.

It will mean deep spending cuts in nearly all federal agencies, including the Pentagon.

It will mean cleaning up the budget process.

The long and dishonored tradition on Capitol Hill of tucking special-interest appropriations into legislation needs to end. If a project, no matter how worthwhile, has a strictly local reach, it shouldn't receive federal dollars.

It also will mean overhauling the tax code to close loopholes, eliminate breaks for special interests and reduce the amount of fraud.

And once Congress and the president show that they have the discipline to significantly cut spending, and once the tax code is rewritten to promote fairness and capture lost revenues, then Americans will need to accept the fact that taxes either will have to increase or be assessed more evenly. The nation can't continue to run a system in which half of wage earners pay no federal income taxes.

The looming debt crisis that faces this nation if it doesn't alter course has risen because both major political parties have failed to be honest with Americans about reality. Part of that reality is that the nation can't continue to spend well beyond its income year after year without serious consequence. But another part, one that will be hard for many to accept, is that services will have to be slashed even as taxes may have to rise to pull this nation back from the brink of a fiscal disaster.

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