Suppose we decided to increase taxes/"revenues"? Even if you doubled all individual and corporate income taxes while also doubling employee and employer contributions to Social Security, our nation would still have $11 trillion in debt at the end of the decade, assuming spending plans were unchanged.
Because of all of our past yearly deficits (racked up during both Democrat and Republican administrations, one drunk on social spending and the other on military spending), the United States currently has more than $16 trillion in outstanding debt, and foreign governments own nearly a third of it.
China alone owns $1.15 trillion in U.S. Treasury securities. For perspective, consider that China is providing financing that's nearly equivalent to the 2012 expenses for every part of our federal government that Congress can actually negotiate – the "discretionary" spending that includes our military, justice system, social services, education, transportation and energy.
If nothing changes from current-law tax and spending, gross federal debt will approach $20 trillion within the decade, the CBO projects.
Can this be considered anything but a crisis? It is the worst kind of problem, an insidious one that has surfaced after decades of horrific incremental neglect and mismanagement. Yet, can this be reversed? The answer is yes, of course, as America has a rich history of tackling hard problems once we have set our minds to them. But, given that the political parties seem to be squarely at odds on many major issues, it seems unlikely today. What is needed is a negotiated law and debt-reduction plan (perhaps covering as much as 25-30 years) that takes effect automatically and that Republican and Democratic leaders agree to in advance.
When a new president or Congress inevitably comes in with their particular agenda, they would be boxed into the limits of an overall plan already agreed to. View this as an entitlement program in reverse- a plan that is not subject to the whims of good political speechmakers. Otherwise, we will continue to have presidents and congresses coming in and pushing their programs du jour. Because of the advanced stage of our debt problem, that is the only way out.
People with illnesses take drastic measures to save their lives, and their families encourage and support them through the fight. In the same way, businesses and individuals of all political parties need to call on our elected representatives to lay out a treatment plan that touches every part of our economy.
The opinions here are those of the writers and not those of ABC News.
Mary Ellen Biery, Research Specialist at Sageworks, contributed to this article.
Brian Hamilton is the co-founder and chief executive officer of Sageworks and a noted expert on privately held companies. He is an original architect of the company's artificial intelligence technology, FIND, which is used by approximately 700 financial institutions and 5,000 CPA firms to perform financial analysis of privately held companies. He is currently a guest columnist for Forbes and Inc.com. Brian also oversees Inmates to Entrepreneurs, a community outreach program focused on teaching ex-offenders to start low-capital businesses.