by Bruno Korschek

Created on: January 30, 2011

Before we try to understand why the Washington political class is so clueless about the gathering budget and debt storm clouds that are fast approaching, it might be a good idea to review the latest estimates from the Congressional Budget Office (CBO) relative to the country's financial shape, estimates that are very scary:

- Within a few months, our national debt will have escalated to $14 TRILLION or the equivalent of $121,739 per United States household.

- At an average household income of about $60,000 a year (pre-tax), each American household would have to go without food, shelter, clothes, or anything else for over two years to pay off their portion of the national debt as it stands now.

- If the government and the political class that runs it do not change their spending habits immediately, another $7 TRILLION will be added to the nation's debt over the next ten years. At that time, $21 TRILLION in debt will come out to about $136,000 a year per household if you assume the number of households grows at a rather robust 3% a year.

- However, to hit that $7 TRILLION number, the political class would have to allow all of the newly renewed tax cuts to expire in two years, they would not make any further adjustments to the Alternative Minimum Tax snafu and they would have to actually implement the draconian Medicare cuts they are supposed to do. These three steps are probably unlikely, given the spineless nature of our politicians, which means that it is not an additional $7 TRILLION but a more realistic $13.6 TRILLION. This would put the overall debt at almost $28 TRILLION and the equivalent household responsibility at $179,000.

- The CBO report goes on to estimate that interest on that debt over the next ten years would be around $5.4 TRILLION. Since the Obama administration has proposed cutting spending by only $478 billion over ten years and the Republicans have targeted $2.5 TRILLION in budget cuts, neither party's half hearted efforts at fiscal restraint will come close to just paying off the interest on our debt. In this reality, the United States will never pay off its ever increasing debt load. This is like someone's personal finances who constantly spend 70% more than what they earn and who only pays off a fraction of that 70% amount every month. The simple math will eventually crush them.

- By the year 2021, the CBO estimates that the country would be paying more than a TRILLION a year just in interest payments on the debt. For comparison purposes,

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