Federal debt is out of control and is rapidly approaching $9 trillion, over $30,000 per person and $84,000 per average family of 2.7 people. Federal debt, as a percentage of GDP, has doubled in the last 25 years, increasing from 32% to near 70%.

Consumer credit and mortgage debt are also rising at an alarming rate, now totaling about $13 trillion, or $123,000 per family. Personal saving rates in the U.S. have been declining for 20 years, and for the first time since 1934, we have witnessed National dis-savings. In the third quarter of 2005, households spent 1.5% more than their disposable income.

Corporate debt has declined somewhat, in part because corporate profits as a percent of both corporate revenue and GDP have increased. Declining corporate debt does not, unfortunately, come close to offsetting record personal and federal debt. Lower corporate debt is obviously one of the few good signs in our economy, but it is of concern to the extent that higher corporate profits are due to increased market and political power of corporations.

America’s unsustainable, unprecedented trade balance continues to grow and now approaches $800 billion annually, growing at $2.1 billion per day and $1.5 million per minute. Thus America has a dual problem of an alarming and unsustainable trade balance and unprecedented federal and personal debt.

The main causes of America’s trade deficit are a lack of domestic saving and ideological zeal for free trade, no matter what the cost to the working class and the middle class. The main causes of the unsustainable federal debt are the Iraq war combined with politically popular tax cuts for the wealthy. Reliance on foreigners to cover our unsustainable appetite for credit should be placed at the feet of Americans’ spendthrift ways.

There is a tendency to place the blame for our economic and financial problems on others – especially China – but the real problems are largely here at home. Our problems are largely made in America, not China. As Pogo once said, "we have met the enemy and he is us."

In only a few short years, poorly conceived "Made in America" economic policy has quickly caused the United States to become highly interdependent economically with China. Yet, China is a dictatorship. China does not believe in free, competitive markets. Is that what Americans want? Apparently we do.

As The Economist recently stated, "Beijing, not Washington, increasingly makes the decisions that affect workers, companies, financial markets and economies everywhere."

In a letter to John Adams, Thomas Jefferson said: "Yes, we did produce a near perfect republic. But will they keep it? Or will they, in the enjoyment of plenty, lose the memory of freedom?" Certainly the enjoyment of plenty – cheap imports and easy credit – has led to dependence on a dictatorship and a subtle loss in economic freedom for Americans. Looks like Jefferson’s concerns were right on target.

Is America broke? Financially, no. But we are close. Very close.

What is broke is the democratic policy process envisioned by our Founding Fathers. Our economic policy process – foreign and domestic – is in shambles. America has no clear plan for digging itself out of deep economic problems. Not even the corporate puppet masters have an apparent plan. Our so-called elected representatives are not openly discussing the deep problems with debt, economic interdependence with China, loss of economic freedom for most of us, the disappearing Middle Class, falling wages for the working class, increasing wealth for a few, rural areas becoming sparsely populated ghettos, and a host of related problem. At most we get political rhetoric or unsupported economic ideology – known to OCM members as B.S. – from all of the political parties, democrats, republicans, independents, libertarian, or whatever.

America, can we talk? Meaningful talk?RT