At times it must appear to readers that we are obsessed with the status of the U.S. economy and the incredible strain unbridled deficits and debt will put on it in the long run.
Guilty, as charged. Borrowing almost one-third of the money needed to operate the federal government every year is unsustainable. One simply cannot borrow a trillion dollars a year indefinitely.
Furthermore, although there are no immediate signs that the U.S. is having trouble finding people to buy our debt, we are setting a terrible example for other countries. And many following our lead are starting to have major problems.
A look at some of the headlines in Wednesday's Wall Street Journal is instructive. On Page 11A are stories titled "Lending Gaps Challenge Central Bank" and "Swiss Economy Shows Weakness." Page C1 has a lead story with the headline "Spain Seeks to Stem Bank Crisis."
All of these stories deal with economies in Europe. When we think of troubled European economies, we think of Greece and Portugal. Spain apparently needs to be added to that list immediately.
The story about the lending gaps relates the problem with trying to control interest rates by the European Central Bank. The rates are noticeably higher in Southern Europe where the economic crisis is more immediate - despite all of the countries sharing a common currency, the Euro.
There may be one currency, but there are 17 separate countries - and lenders are judging those economies individually, not as a bloc. The efforts by the European Central Bank are largely ineffective as a result.
As we wrote yesterday, no matter who wins the election here in November, big changes are coming in our taxing and spending policies.
As the United States gets its house in order, it will do the world a large favor by leading by example. Right now, the example we are setting is causing chaos.
* Editorials reflect the opinion of the publisher.
