. . .   UpQuick edited excerpts continue here from a July 2011 article in:  USA Today

The debt ceiling statute was passed in 1917 and has been routinely raised by congress. Since spending decisions reside with Congress, the debt limit has been increased automatically every time congress authorizes yet more spending over the limit.

The nation's debt hit $14.3 trillion on May 16, 2011; but the Treasury, using various accounting manipulations, continued to increase spending. But the Obama administration will run out of tricks on Aug. 2, 2011 at which point the U.S. could default on its debts unless the debt ceiling is raised.

Congress passed new spending on April 15, 2011 which increased the debt by $1.7 trillion more for 2011 alone. Nothing seems to slow down this Obama administration and congress from reckless spending. For decades, Washington has blindly increased the debt limit while doing nothing of consequence to stop spending money that it doesn't have. The latest folly was approved 260 votes for and 167 against.

The U.S. debt is horrendous, but America still has great wealth. The debt has two components: public debt and intragovernmental holdings. $9.7 trillion of public debt is what the U.S. has borrowed through Treasury securities: Treasury bills, notesm and bonds. The remaining $4.6 trillion is intragovernmental debt, government securities held by the trust funds for Social Security and Medicare. This $4.6 trillion is accounting fiction -- special government bonds used for the trust funds would be counted as identical assets and liabilities on a standard balance sheet. However, Medicare and Medicaid are now pay-as-you-go operations funded by new payroll taxes.

Congress could authorize cuts in Social Security and Medicare (although that would be unconscionable theft from those who have already paid in), but it cannot renegotiate the terms of outstanding Treasury securities without defaulting.

The $9.7 trillion part of the debt is horrendous, but what makes this debt onerous is the fact that it keeps getting endlessly worse with not even any attempt to reduce it. Last year U.S. public debt was about 58% of U.S. gross domestic product. The UK's debt was 79% of GDP. Greece's was nearly 124%.

The federal government's foolish "stimulus" spending over the past year grossly inflated the debt. The hope against hope is that tax revenues will rise if the economy expands.

Bond traders are lenders whose only interest is to collect interest payments and get their money back when bonds mature. Any hint of default sends interest rates soaring. Investors have always trusted the U.S. because it has never defaulted, and the U.S. still does have vast resources. Gold reserves are worth half a trillion dollars at the current price. Most U.S. debt is held by U.S. investors: individuals, banks, and insurance companies. The largest foreign holder, China, owns about $1.1 trillion of U.S. Treasury securities, about 11% of public debt.

The best remedy would be to cut spending by cutting federal salaries, furloughing government workers and cutting services (which are now grossly over-spent).

At some point, the U.S. MUST take steps to reduce its chronic deficits.

To pay off the debt now would require $47,000 from every citizen -- man, woman, and child in the U.S. -- or $1,572 a year if spread out over 30 years. Of course, illegal immigrants pay nothing, but instead the flood of illegals drastically increases U.S. debt.

The only hope to correct this mess is to reduce spending and eliminate annual deficits. Even modest declines in debt would improve the nation's debt-to-GDP ratio. That was the U.S. approach after World War II -- smaller government with no wasteful agencies such as Environmental Protection and the Energy Department, among others. Other countries have improved their debt-to-GDP ratio by spending cuts. Sweden's has fallen from 50.4% in 2005 to 39.6% today by cutting spending and reforms to boost their economy.

What is desperately needed now is a voter rebellion to vote every excess-spending politician out of office. Canada did that recently when the public attitude became, "If you don't cut spending, we won't vote for you."   Click to view the big multi-category USDebtClock.org