America's Real Financial Crisis? It's Debt

Washington must stop selling debt as its top export if it wants to solve today's financial crisis, Justin Fox argues in Time. Political talk of the nation's staggering $731 billion deficit often centers on trade pacts and exchange rates. But "if the US simply stopped borrowing so much—if Washington balanced its budget and restrained financial companies from loading US households with ever more debt—the current account deficit would evaporate," writes Fox.

A federal bailout makes sense as a crisis-management tactic, but only in the short term. Long-term, America is incapable of safely selling off debt securities as it has for the past three years, Fox warns. But it's bound to be tough to change old habits. "Can you imagine John McCain or Barack Obama going around saying he wants to reduce your standard of living?" asks one financial expert. Concedes Fox: "Probably not."
(More national debt stories.)