Spending has grown 7 times as much in real inflation-adjusted terms as median household income over the last 40 years. Like Greece and Spain and much of the rest of the developed world, we will be forced to make hard choices. We cannot afford to do everything that even conservatives would like, let alone liberals. We cannot fight two wars, increase spending on health care, stimulate a faltering economy, and fun [sic] a 20% explosion in federal employees in just one year, etc., etc.
Pay attention to Greece and Spain and especially Japan over the next few years. Unless the US gets its fiscal house in order, we will be next. It will not be any easier for us in five years than it is for Greece today.
Five years may be optimistic. There is no doubt that we are headed for a major train wreck – the only question is the form it will take. We can all see the high levels of unemployment, widespread home foreclosures, states making draconian budget cuts – an unpleasant picture. But in five years, these may look like the “good old days”. Our best hope might be wise political leadership, but our political leaders seem clueless. Still, history shows that strange things can happen, and there are glimpses of mitigating factors. A lot of politicians are having the decency to not run for re-election, so there is some hope. I just wish that more of them would do the right thing.