The federal government reached a distressing milestone this month - $12 trillion in debt. That's about $39,000 for every man, woman and child in the United States.
In 2001, the national debt stood at about $5.5 trillion. In the past eight years, Washington piled up more debt than the nation had accumulated in its entire history.
Foreign countries hold $3.5 trillion of our country's debt, led by China at around $800 billion and Japan at $730 billion. Unless the United States starts living within its means, foreign lenders could decide to end our free-spending ways.
What does this record debt mean? With interest rates at historic lows, the government is paying about $200 billion per year in interest on the debt. But as rates inevitably rise and the government borrows even more, interest payments are projected to soar to $700 billion annually within 10 years.
Paying an extra $500 billion per year is equal to the combined costs of fighting the wars in Afghanistan and Iraq, plus the budgets of the U.S. departments of education, energy and homeland security. There's just no room in the federal budget to absorb that kind of increase.
The bailouts under former President Bush and President Obama, as well as the $787 billion package of tax cuts and spending in February to stimulate the economy, were needed to prevent an economic meltdown. But these actions have only increased pressure on Congress and the President to get long-term fiscal policy under control.
The only solutions are tax increases, or massive spending cuts, or both.
This is not a partisan issue. For decades, under Democratic and Republican administrations, under liberal and conservative Congresses, Washington has spent more than it has collected in taxes and borrowed the rest.
The so-called "tea party" protesters railing against President Obama's spending policies have generated accusations that they are motivated by partisanship. Too bad they stayed silent as debt soared under George W. Bush. But their argument - that the government is living beyond its means - is as correct now as it would have been a year ago. The mushrooming debt is unsustainable.
This crisis hits at the worst possible time. Baby Boomers will continue to put pressure on the government for retirement benefits. Tax increases would help the government's balance sheet, but also would likely hamper economic recovery. The taxpayers on the hook for the bill have been squeezed by stagnant wages, declining home values, and blows to their retirement funds.
Easing the debt burden will take a sustained commitment from leaders in Washington, an effort that is absent in spite of the urgent need.