So what would national bankruptcy mean?

(Hot Air) - One of the things we know in economics is that most people prefer to smooth their consumption over time. There are plungers; there are people who save too much and others who save too little, but on average people get it right. Because most people make less when they’re young, they typically accumulate debt when they are young, only to retire it and accumulate wealth when you’re old. For every individual, insolvency means you no longer can make a credible commitment to pay that debt down to zero in your lifetime.

The same applies to government. Governments cannot run Ponzi schemes, accumulating ever-higher amounts of debt. We need to demonstrate that, over time, the total national debt is on a path that leads eventually to its retirement. …

The repercussions over the last three days have been astounding. Sen. Judd Gregg is sounding an alarm over the problem CBO raises. Nouriel Roubini says ”A government that will issue trillions of dollars of new debt to pay for this severe recession and socialize private losses may risk becoming a Ponzi government if–in the medium term–it does not return to fiscal discipline and debt sustainability.” In Canada Diane Francis thinks America may have reached its best-before date. …

Some of this is changing — some people are delaying retirement, others are saving more now — but it’s as if the current administration is turning its back on the very generation that brought it to office. If someone could get them the message…