Stop Digging Such a Deep Hole

One of the lessons Americans should have learned from last year's financial meltdown is that economic principles can be ignored for only so long. The value of stocks, houses and retirement portfolios doesn't always go up. The unaffordable is unaffordable no matter how attractive it appears. And debt comes at a high cost that eventually must be repaid.

Unfortunately, it seems that the nation's political leaders haven't been paying attention.

The numbers within the final version of President Barack Obama's 2010 budget, released this month, show a dangerous spike in the deficit, not just next year but for years to come.

The most optimistic forecast, which also happens to be the numbers the president relies on, projects an additional $8.9 trillion added to the national debt by 2019. By then, the debt would reach 70 percent of gross domestic product, an increase of nearly 30 percentage points from where it stood only a year ago.

The Congressional Budget Office's figures are even more startling (and likely are more realistic about what lies ahead). The CBO projects $11.1 trillion in additional debt, if this year's $1.8 trillion deficit is included.

The ratio of debt to GDP would rocket to 82 percent (it's highest point in almost seven decades).

With the economy staggering, and people crying for the government to act aggressively, it's tempting to push any concerns about deficits aside and focus solely on the current challenges. The president and Congress for the most part have adopted that approach.

But the consequences of falling deeper and deeper into debt cannot be delayed indefinitely. Many economists already are worried that inflation will surge in the next year just as a full recovery from the economy begins to unfold. Imagine the beaten-down housing market trying to rebound if interest rates shoot up as a result of the Federal Reserve being forced to confront inflation.

In time, the government will have little choice but to raise taxes, cut spending or cobble together a combination of both. The reckoning is sure to be painful for most Americans. However, delaying it, the path chosen by leaders from both parties for many years, will only worsen the suffering once it can no longer be avoided.

That's a reality that the state's congressional delegation must not only accept but also proclaim forcefully on Capitol Hill and at the White House.

REPRINTED FROM THE INDIANAPOLIS STAR.

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