The Debt Tsunami

http://www.washingtonpost.com/wp-dyn/content/article/2009/06/27/AR2009062701979_pf.html

One way to look at just how much debt we've taken on. Astonishing. And it is repeated at the State, City, County level as well (googling 'the death spiral' always gets some interesting budgetary results). Apparently, there's a real appeal to spending other people's money for the purpose of getting oneself re-elected.

"The death spiral" is a term to describe what will happen to the federal budget if there's not a miraculous and unlikely reversal in the current debt trend. First, as the debt becomes more and more obviously unsustainable and therefore riskier for those that lend to the govt, the treasury will be required to pay more interest to attract investors in US Govt bonds. That will drive an increase in the amount of the budget that is spent on debt payments. That will contribute to, accellerate, the inability to pay for obligations (the largest of which is currently Medicaid - as of two years ago, Medicaid's obligations exceeded all other entitlements), and reinforce the cycle making rates higher, budget more precarious, and so on, until we cannot continue to find those who will lend.

My favorite part of the linked article is how they just roll social security in with the other 'spending' programs - weren't they supposed to just hold our own money for us and give it back to us when we needed it later in life? That's not spending ... that's investing, right? Except the politicians already spent our money - to get themselves re-elected presumably - and now they're going to generate new taxes so they can pay back the loan they took ... from us .... for our own benefit ... WTF?