America's debt is expected to nearly double over the next 10 years, to $9 trillion. Here's how the big numbers are likely to affect you.
Music Anthony Mason: Here's the bottom line on America's ballooning budget deficit.
>> It means you're going to ultimately be paying higher taxes. Anthony Mason: The total national debt, according to one study, amounts to $184,000 for every man, woman, and child in the country. It's like a massive mortgage we're all paying interest on. The U.S. is still a $14 trillion economy. But the nation's debt is now more than 50 percent of the country's economic output, the first time that's happened since World War II.
>> Debt in the United States is growing so rapidly, we're viewed by the rest of the world as profligate, imprudent, and incapable of managing our own affairs. Anthony Mason: The government has been spending borrowed money to fight the recession and to finance wars in Iraq and Afghanistan. And the debt is expected to continue to grow to $9 trillion over the next decade as we face the swelling cost of entitlement programs like Social Security and Medicare.
>> We'll either need wrenching, wrenching spending cuts; a boom in the economy; or a new funding source; or some combination to get this fiscal house back in order. Anthony Mason: Income tax hikes alone won't be enough, says economist Michael Darda. We may need a national sales tax.
>> We're all going to have to have a stake in this game, and we're all going to have to pay a little bit more and probably get a little bit less. Anthony Mason: The U.S. economy has needed an injection of borrowed money to help stimulate a recovery. But, long term, the rising debt payments on all those loans could land us back in another economic crisis. Katie. Katie Couric: Lots of economic news today. But let's go back to Ben Burnanke, if we could, Anthony. He gets to keep his job; but it sure won't be easy for him, will it? Anthony Mason: Yeah. Be careful what you wish for. The Fed Chairman has had his pedal to the metal trying to get the economy back up to speed. The trick here is, when do you take your foot off the accelerator? If he does it too soon, the economy could backslide into another recession. If he waits too long, it could overheat. We could ignite inflation and a whole other set of problems. So timing here is going to be everything. Katie Couric: And let's end on a positive note. How encouraged should we be by this rise in housing prices? Anthony Mason: These are very promising numbers. Now, 18 of 20 metro areas showed home prices up for the second straight month. Las Vegas and Detroit, they're still struggling severely. But Dallas and Denver showed price gains for the fourth straight month now. Overall, the numbers remain weak. But the hope here is that these are the first signs of a turn. Remember, house prices were critical in this whole recession. They're going to be critical to a recovery. Katie Couric: All right. Anthony Mason. As always, Anthony, thank you.
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