Hey, China, Could We Borrow Another $700 Billion?

Reason magazine explains why the bailout bill currently moving through Congress is, at the very best, a temporary solution:

Today the federal government wants to bail out an industry that can't meet its obligations. But it increases the chance that the next time, it will be the federal government that teeters on the brink of financial doom.

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Add it all up and you find that our government has suddenly run up a trillion dollars in new liabilities. That sounds like a lot—unless you compare it with Washington's other outstanding commitments. Currently, the national debt stands at roughly $10 trillion, which is about three-quarters as large as our entire annual gross domestic product. But The Concord Coalition, a Washington-based fiscal watchdog group, says explicit and implicit obligations amount to $53 trillion—"almost as much as today's net worth of all household assets."

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With each year, government spending rises, and the budget deficit gets bigger. As the baby boom generation retires, the gap will grow. Given current trends, federal outlays stand to double between now and 2050, while revenues remain roughly stable.

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When you spend more than you bring in, you have to borrow to cover the difference. In the next three decades, the government's official debt is on track to triple. But at some point, the Treasury predicts, "the world's financial markets would likely cease lending to the United States."