Imagine if you had to spend 40% of all you earned on credit card interest. Not paying down your credit card debt, just paying the interest. How secure or hopeful would you feel about the future? Would you be looking to borrow more?
Yet, that's just the situation we're in.
In 2009, 40% of our income tax will go to pay interest on our national debt. Lawrence Kadish in Taking the National Debt Seriously writes that such debt makes our future unstable
unless Americans are made aware of this financial crisis and demand accountability, the very fabric of our society will be destroyed. Interest rates and interest costs will soar and government revenues will be devoured by interest on the national debt. Eventually, most of what we spend on Social Security, Medicare, education, national defense and much more may have to come from new borrowing, if such funding can be obtained. Left unchecked, this destructive deficit-debt cycle will leave the White House and Congress with either having to default on the national debt or instruct the Treasury to run the printing presses into a policy of hyperinflation.
It is against this background that Washington is now debating whether to create social programs it can't afford.