THE BLOG

Preventing a Bankrupt USA

05/25/2011 01:10 pm ET

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Don't say it can't happen.

The Romans went bankrupt. So did the Soviets, Enron, Argentina, Lehman Brothers, even sweet little Iceland.

With an estimated deficit of $9.3 trillion over the next decade, the United States will almost double our current debt of $11 trillion, leaving us a tidy $20 trillion in the hole. Guesstimating our 2020 population at 330 million, that's about $60,000 per person. (Which, due to my limited accounting skills, doesn't adjust for inflation--but we can be confident that it's still a significant number.)

So what? Plenty of countries operate on permanent deficits. We won Cold War on deficits. We pulled out of the Depression on deficits. Obviously, deficit spending has a home in the economic toolbox.

Furthermore, the government has to spend now, simply because nobody else is. For all those who think the government's overspending, I encourage them to urge their friends to buy an American car or
expensive electronics or take that dream vacation to Hawaii. Better yet, ask them to invest in some venture capital funds, or even the stock market.

Exactly.

We have a government for problems like these--to invest in the economy when we can't or don't want to, to solve the huge problems only massive organizations can solve. Still, the ramifications of our
national spending spree are scary. As everyone who's had the misfortune to work at a tanking company knows, one day the bill will come due. And that's no fun at all.

Politicians like to fall back on how American ingenuity has saved us before, and it'll save us again. This underscores the need to change our bad habits--investing in electronic medical records and green energy while cutting farm subsidies and earmarks--which, in turn, upsets the time-tested strategies for crusty Congressmen who know, more than anything, how to get elected.

Unfortunately, the Republican nay-sayers rarely offer ideas, only objections. But instead of obstructionism and political posturing, we need plans, a grand vision, a reimagining of American society. Nobody likes going in the hole--especially when the risk of bankruptcy is real--but all successful businesses start by investing taxpayer money on ideas that people want and value, then paying back their debts when the idea takes off.

Spending smarter--now that's change we can believe in.

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