Is there any way out of America's financial woes? If you stand back and take an honest look at the growing debt and the promises we've made, the situation seems hopeless. Not only have we promised baby boomers their Social Security and Medicare benefits, we're now close to adding health care for all and money to buy a new car.

It's no wonder that foreigners who are helping fund our nearly $12 trillion national debt are thinking twice about lending us money. It appears that America has few choices when it comes to making good on its promises:

Higher taxes. Every indication is that tax rates will rise and new taxes will be imposed. But history says tax increases will kill the economic recovery, costing jobs and creating a larger deficit.

Borrowing more. But will foreign central banks be willing to lend at the current low interest rates? And if we need to entice them by raising interest rates, that would slow the economy, thereby creating a bigger deficit and more need to borrow?

Printing the money. It's not the old-fashioned printing presses that are revving up the money supply. These days, the Fed can do it by purchasing all sorts of assets, from Treasury bills to Freddie and Fannie debt to bank loans. The Fed simply pays for these assets by creating a credit on the books of the banking system.

If the obvious solutions won't work anymore because we're all too smart to fall for those old tricks, then how will America make good on its promises?

There is only one way out of our financial dilemma: economic growth.

Growth is the answer

And before you give up on that possibility, a look at history might give you some reason to be optimistic. Gary Alexander is an economic historian who says we're way overdue for a "technological miracle."

This is not wishful thinking. In a fascinating blog at Navellier.com, blogs.navellier.com, Alexander points out that this new millennium is woefully lacking in new inventions compared with the start of the 20th century. Alexander gave me permission to quote extensively from his commentary, which certainly makes his point:

"We're 98 percent deep into the first decade of the 21st century, but where is the first scientific "Eureka!" moment? The dawn of the last century delivered an almost nonstop wave of world-changing inventions in the first few years after 1900, ranging from the titanic to the trivial:

"On Dec. 14, 1900, Max Planck presented the postulate that gave birth to quantum physics.

"1901: Guglielmo Marconi sent out the first trans-Atlantic radio broadcast. In commerce, King Gillette invented the double-edged safety razor, and Hubert Booth invented the vacuum cleaner. Continued...