Debtor nation

You might say I've been waiting 22 years for this.

In two days the National Commission on Fiscal Responsibility and Reform will tell Barack Obama – and all of us – what must be done if this nation is to dig out from under its mountain of debt.

Nine months ago when the president established the commission, the United States owed $12.4 trillion. The national debt since has climbed to $13.8 trillion. Twenty-two years ago when I met Gary Stern, it was less than $3 trillion.

At the time Stern was the president of the Federal Reserve Bank in Minneapolis (a job he held for 24 years before retiring a year ago). When I traveled to his office to interview him, Ronald Reagan was president, and the United States was running annual deficits of $200 billion to $300 billion, which struck me as incredible then but now seem almost meager in comparison to the trillion-dollar deficits of today.

I asked Stern whether it troubled him that the nation was spending money faster than it collected it in taxes. He replied that it did and explained how being hooked on debt can harm a nation and the people who live in it.

Like other South Dakotans, I'll wrestle a bear or step in front of a bus before spending money I don't have. When I met Stern, I was convinced Washington eventually would begin to balance its budget and maybe even start repaying the $3 trillion it owed. The nation's leaders couldn't possibly be crazy enough, I thought, to keep doing what they were doing.

Boy, was I wrong.

Because it is borrowed money, the United States must pay interest on the national debt. In fiscal 2010 alone, interest on the debt totaled $413 billion – almost twice the $214 billion charged in 1988 when I interviewed Stern.

According to the Congressional Budget Office, interest on the debt will double again by 2016 and exceed $1 trillion in 2019.

It deserves repeating: If we do nothing and instead hold to the course we're on, nine years from now more than $1 trillion will be added to the national debt every year from just the interest charged on it. That is more than what will be spent on defense. It also is more than what will be spent on Medicare.

This must be what it is like to be handed a ticking bomb and the directions to defuse it – only the directions are in Chinese and the bomb is set to go off in 30 seconds. Or to be tossed a shovel after it snowed 5 feet – and told to clear the interstate between here and Fargo. The national debt has gotten so big, it seems hopeless.

Because we've ignored it for so long, sharp spending cuts alone no longer will be enough to make a dent in the debt. Nor will significant tax increases alone. Nor will substantial changes to Social Security and Medicare alone. It will take each of these as well as an economy in which more people are put to work and paying taxes.

Those who claim there is a single silver bullet capable of solving this problem – and there are people on and off Capitol Hill who think this – are either delusional or dumb. Released earlier this month by the chairmen of the fiscal responsibility commission, a draft proposal in advance of Wednesday's final report contained dozens of suggestions. If nothing else, the proposal made it clear just how bad the situation is:

§         If you own a home, it eliminates the federal income tax deduction of the mortgage interest you pay every year.

§         If you're a federal employee or a member of the military in a noncombat operation, it freezes your salary for three years.

§         If you farm, it cuts farm subsidies by $3 billion.

§         If you own stock, it taxes capital gains and dividends as ordinary income instead of at the present rate of 15 percent.

§         If you purchase health insurance through your employer, it eliminates the income tax exemption your health benefits now receive.

§         If you drive, it increases the federal gas tax – now at 18.4 cents per gallon – by 15 cents between 2013 and 2015.

§         If you earn a six-figure salary, it raises the amount of your salary subject to the Social Security payroll tax from $106,000 to almost $190,000 in 2020.

These are but a fraction of the recommendations in the proposal – which aims to save almost $4 trillion from 2012 when it begins and 2020. Still, by their own admission, the commission chairmen – former U.S. Sen. Alan Simpson of Wyoming and Erskine Bowles, chief of staff to President Clinton – acknowledge that their proposal for all its pain neither erases the federal deficit nor reduces the national debt during the next decade.

In 2020 the deficit under the proposal is projected to be $382 billion. The debt that year likely will eclipse $20 trillion.

No individual, no company and no nation – not even this one – can borrow forever. Eventually, neither the individual nor the company nor the nation can pay back the money because they don't have enough to do it and no one will lend them more. The risk is too great.

If we're to avoid that certain day of reckoning, it will require a shared sacrifice, and sacrifice isn't something we're particularly good at. You see it in where we live, in what we drive and in how we act. We're known as the me generation. We'll give – but we prefer to take. We'll look out for others – but only after we look out for ourselves. We're satisfied – until someone else has more than we have.

Already, the proposal from Simpson and Bowles has drawn fire. Some say it goes too far. Others say it doesn't go far enough. Still others say the nation finally is beginning to climb out of a deep and difficult recession, and to cut spending and raise taxes will slow the economy at a time when we should be stepping on the gas, not hitting the brakes. We should wait, they say, for better days.

Then there are those who suggest it makes little difference what the commission and the president propose because ultimately Congress has the final say, and Congress never will vote in favor of spending cuts and tax increases because to do so is a political death sentence, and in Congress, career comes before country.

I've listened to these arguments – or ones like them – for 22 years. I'm tired of hearing them.

In two days we'll be asked to do something terrifically hard and unpleasant. If we do it, we no longer will be known as the me generation.

We'll be known as the we generation instead.