I've never been a debt-is-going-to-kill-us doom sayer. But we haven't seen these levels of government debt before since World War II. And the debt is projected to keep on increasing until by 2038 it will be 200% of GDP (See chart here).
And as debt increases it will suck more an more vitality out of our economy. As Investors' Business Daily says in an unsigned editorial:
At that level, our fast-growing, high-innovation, high-wage economy begins grinding to a permanent slowdown. The accumulated debt will become a millstone around our necks. Fleeter, less-indebted competitors in the developing world will sprint right past us.
If you don't think so, just look at Japan. It was the world's fastest-growing developed economy for most of the postwar era. But it stumbled in the late '80s and began a debt-financed binge of "stimulus" packages in the 1990s and early 2000s. Today, it has the worst of all worlds: a 200% of GDP debt load, and low or no growth.
Why? Because too much money will be sucked out of the economy to service the debt:
"Government borrowing reduces resources available for private investment, leading to lower productivity, wages, and economic growth," noted the Heritage Foundation in a recent study.
The Obama Administration and the Spendocrats in Congress are, instead of looking for ways to reduce spending are simply increasing the debt limit and spending more. (And no, I'm not advocating raising taxes, either.) They are looking at an up to $1 Trillion health care reform and a second stimulus. Obama has said we can spend our way to prosperity. Which is like a family running up their credit cards to their limit and saying that made them rich.
The only way to stop this is to stop the spending, reform entitlements, and don't start any new ones. All three of which the Spendocrats are loath to do.
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