I have taken a break from blogging because my blog was focusing less and less on business and intellectual property matters and more on politics.  However, the insanity in Washington has compelled me to add my two cents.

The government announced that the deficit for the current fiscal year is $1.2 trillion.  That is pretty frightening.  What is even more frightening is that the deficit reported by the government does not include any of the bailout proposals which Congress has passed.  Thus U.S. News' analysis is that the current deficit is actually $2.2 Trillion - or 15.5 percent of the Gross Domestic Product.  At this rate, the total debt will exceed our entire GDP within about 2 years. 

While President Bush has helped create the mess with his lack of fiscal responsibility, the plan being floated by President-Elect Obama is to spend our way out of our current financial crisis.   My question is - with what money?  By the end of this year the Federal Government will owe $40,000 for every man, woman and child in the United States.  Yep, if you are the typical family of four, your share of the national debt is $160,000.   If you are a family of seven, like mine, your share is $280,000. 

We are in the current financial crisis because people went into debt hoping to get rich.  Many people bought houses they could not afford hoping to flip them for a handsome profit.  Others bought multiple houses believing that they were going to be rich as those houses rose in value.

The borrowing our way to prosperity worked so well in the private sector that the government is now going to follow the same approach.  Part of our problem now is that banks do not want to lend to people because they are afraid that the people will not be able to repay the loans.  Is there any chance that China and other countries that buy up our debt may grow a little bit concerned that the country that is already leveraged to the hilt is seeking bigger and bigger loans? 

While the government is a run-away train, the looming train wreck comes in the obligations that are just around the bend.  The baby boomers are coming of retirement age and expect to receive Social Security and Medicare.  We have $54 Trillion in unfunded liabilities.   How are we going to pay back the $12 Trillion debt while we try to pay Social Security and Medicare for a large chunk of our population?

We have mortgaged the lives of our children.  The only way out is for the government to get control of itself.  Yes, we will have a few rocky years - but we need not repeat the mistakes of the Great Depression by having the government try to solve all of our problems - only to make them worse.