An update on the increase of the national debt limit and some facts about the national debt.

Back in August the Treasury Secretary Timothy Geithner formally requested that Congress raise the $12.1 trillion statutory debt limit due to the massive amount of debt that the Country is acquiring due to the recession and the massive amount of government spending that is taking place under the guise of helping the economy to come out of the recession. The time has come for Congress to raise the national debt limit which has been increased twice since 2002, "House Majority Leader Steny Hoyer said Friday that Congress needs to raise the limit by at least $1.8 trillion". This would be the largest increase in to the national debt limit in the history of our.

The Heritage Foundation has done a quick run down on the national debt,

Why the Debt and the Debt Limit Matter

• $12,000,000,000,000: The total federal debt has reached a whopping $12 trillion. About $7.6 trillion is debt held by the public, which has been borrowed from citizens and foreign countries, and $4.4 trillion is debt held by the government, which has been borrowed primarily from the Social Security trust fund.
• Debt Is Earning Interest That Taxpayers Must Pay: Public debt holders are paid annual interest from the federal budget, which must be paid with taxpayer dollars. In 2009 interest payments amounted to $209 billion.
• Too Much Debt Will Slow the Economy: Government borrowing reduces resources available for private investment, leading to lower productivity, wages, and economic growth.
• Only Getting Worse: The recession and excessive spending have caused the debt held by the public to grow sharply to 56% of the economy, topping the historical average of 36%. To make matters worse, entitlement programs will double in size over the next few decades and cause the national debt to reach 320% of the economy.[Emphasise mine]
  
• Raising the Debt Limit: Congress will vote to determine the limit for the federal debt, which currently stands at $12.1 trillion. Since the national debt has hit $12 trillion, Congress plans to raise the debt limit.

Congress Plans to Quietly Raise the Debt Limit

• Congress Hopes Americans and Credit Markets Don't Notice: To avoid scrutiny, congressional leadership will likely try to sneak the debt limit increase into a "must-pass" measure, such as the defense appropriations bill. Doing so would limit necessary debate on the debt in the hopes that taxpayers and creditors would not respond.
• Increase Would Be Largest in History: Because this will be a difficult vote, the majority's leadership has suggested raising the limit enough to avoid another vote on the debt limit before the November 2010 elections. The estimated $1.8 trillion increase would be the single-greatest increase of the debt limit in history.

"Entitlement programs will double in size over the next few decades and cause the national debt to reach 320% of the economy." Clearly some of these entitlement programs will have to be cut or drastically reduced. The sad thing is that the government has forced people to be dependent on the government. For example, around twelve point four percent of one's pay check is taxed to pay for Social Security and two point nine percent to pay for Medicare, you pay seven point seven percent and your employer pays seven point seven percent. Fifteen dollars out of every one hundred you earn is taxed just by these two taxes alone. (I got these last figures from my Social Security statement.) So what is going to happen when all of these people are forced to suck on the government teat and it runs dry? As of now I don't see how the latter will be avoided?

Some more interesting information about the debt,

By 2030, Bergsten anticipates the net foreign debt of the United States will exceed $50 trillion, or 140 percent of gross domestic product. He predicted that by 2030, the United States will be paying $2.5 trillion a year to the rest of the world, equal to the nation's current total spending on health care, just to pay the interest on U.S. debt.[...]He continued, It has long been known that large external deficits pose substantial risks to the U.S. economy because foreign investors might at some point refuse to finance these deficits on terms compatible with U.S. prosperity.'Any sudden stop in lending

to the United States would drive the dollar down, push inflation and interest rates up, and perhaps bring on a hard landing for the United States – and the world economy at large.'

I am not fully aware of what the implications that these numbers will have for the economic future of America or the world; but from what I understand, it is not going to be good for the world economy, as much of the other economies of the world are build on a foundation of debt. If an economic collapse is to be avoided, a major shift in the direction of our country needs to occur. Even if this does occur, America will still be dealing with the effects of the debt caused by the recession and all of the other economic reforms and the overall shift of economic power from the private sector to the government that are occurring. The national debt will be a major drain on the overall economy for some time to come. I don't know if what happened in California will happen on a national or world scale, as Melkor stated, because many people are being forced to be dependent on the government for their substance during retirement and, in the next decade or two, their health care. The government is absorbing a lot of the private sector and using a lot of its resources, which there is a limited amount of, so that there will be little left for the private sector to produce anything. From the information I have now and my understanding of that information, I believe a major economic disturbance is a very real possibility at some point down the road.