In addition to what I wrote yesterday, I'd just like to add that no, I don't think we're facing a debt crisis, and no, I don't think our structural budget deficit is particularly unsustainable. I suppose I could summarize my reasoning for you, but it's Friday afternoon and I'm tired, so I'll just let Paul Krugman do my work for me:
Now, America does have a long-run budget problem, thanks to our aging population and the rising cost of health care. However, the current deficit has nothing to do with that problem, and says nothing at all about the sustainability of our social insurance programs. Instead, it mainly reflects the depressed state of the economy — a depression that would be made even worse by attempts to shrink the deficit rapidly.
So, let’s talk about the numbers.
The first thing we need to ask is what a sustainable budget would look like. The answer is that in a growing economy, budgets don’t have to be balanced to be sustainable. Federal debt was higher at the end of the Clinton years than at the beginning — that is, the deficits of the Clinton administration’s early years outweighed the surpluses at the end. Yet because gross domestic product rose over those eight years, the best measure of our debt position, the ratio of debt to G.D.P., fell dramatically, from 49 to 33 percent.
Right now, given reasonable estimates of likely future growth and inflation, we would have a stable or declining ratio of debt to G.D.P. even if we had a $400 billion deficit. You can argue that we should do better; but if the question is whether current deficits are sustainable, you should take $400 billion off the table right away.
That still leaves $600 billion or so. What’s that about? It’s the depressed economy — full stop.
[...] Putting all this together, it turns out that the trillion-dollar deficit isn’t a sign of unsustainable finances at all. Some of the deficit is in fact sustainable; just about all of the rest would go away if we had an economic recovery.
Fine, sure, scoff at Krugman's analysis. I mean, he only won a Nobel Prize in Economics, so what does he know? And if you'd like to scoff at a more data-driven explanation of his thesis, click through to this detailed explanation from Bloomberg.
Despite all the editorial moralizing, the only budget crisis we have at the moment is the one being manufactured by Republicans with their debt ceiling hostage-taking. And that's hardly an excuse for inflicting hardship on the young, the old, the sick, and the poor.