America's Public Finances Cause Worry Abroad

"To most observers, it's becoming increasingly obvious that, within the next 10 years, the U.S. government will simply not be able to borrow money fast enough to keep up with its exploding expenses. That has huge implications for everything Americans do, from funding the military to protecting the environment. The Economic Policy Institute recently projected that under the current tax regime, by 2014 all government revenue would be consumed by four areas of spending: health care for the elderly and the poor, Social Security for retirees, national defence and interest on the debt. There will be no money left for such fundamental initiatives as education, transportation or justice, which means the government would be forced into ever-escalating borrowing to pay for basic programs. Walker's department projects that, under the current tax rates, interest costs on the skyrocketing national debt would be about half of all government tax revenues by 2031. Ten years later, the cost of servicing the debt will exceed all government revenues."