Steve Chapman

By then, two programs -- Medicare and Medicaid -- will cost as much as the entire federal budget does today. Which means that, essentially, we'll be financing two federal governments. If you dislike carrying a defensive end on your back, wait till his twin climbs aboard.

Even the government admits this can't go on forever. A report from the Treasury Department says that without big increases in revenue, "Medicare, Medicaid and Social Security spending and the related deficit financing costs will far exceed the government's ability to pay."

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."

Then what? David Henderson, a research fellow at Stanford's Hoover Institution and editor of The Concise Encyclopedia of Economics, ticks off the options: We could close the budget gap by drastically cutting spending or raising taxes. The Federal Reserve could print a lot of money, reducing the real value of the debt and making it easier to pay off. Or the government could default -- in short, declare bankruptcy.

It may sound absurd to think the United States government would ever walk away from its debts. But if we are not willing to make painful sacrifices now, why would we be willing to make excruciating ones then? Inflation, says Henderson, is also unappealing because it would cause such pain here at home. Default would be more attractive to some Americans because we not only would escape our debt but also "would be screwing foreigners."

Once they have rescued the financial sector, maybe Henry Paulson and Ben Bernanke can answer the question that will eventually follow from this and other commitments: Who will rescue the federal government?

Steve Chapman

Steve Chapman is a columnist and editorial writer for the Chicago Tribune.

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