A Day of Reckoning

One European country after another has been forced to swallow painful and abrupt spending cuts after years of borrowing too much. That borrowing spree came to an ugly end in Greece where the public reacted angrily when the government had to cut pensions and other spending.

And many worry that the U.S. is headed in the same direction.

Jim Kessler of the centrist think tank Third Way says, "By 2020, cumulative debt will be 90 percent of the Gross Domestic Product," the broadest measure of our overall economy. And, he notes, "That's where Greece was" when it got into trouble.John Silvia, the chief economist at Wells Fargo adds, "If we don't change, the global economy will force change upon us -- much as what we seen in Greece, Ireland, potentially Portugal as well."

Those are nations lenders refused to loan money unless they made drastic and painful cutbacks in spending.

Erskine Bowles and former Senator Alan Simpson, the co-chairs of the Fiscal Commission, worry that could happen to us.

"I'd like to think we have six years," says Bowles, "but I sure wouldn't make a bet on it. And I can tell you one thing -- when the markets lose confidence in a country, they act swifly and they act decisively."

Alan Simpson jumps in to say the trajectory of the U.S. "is the same as these other countries. It's just bigger... And when it happens, it won't be some slippery slope, it won't be six months," he says, making a swift chopping motion, "It'll be like that."

In other words: swift and painful.

Concerns like that brought two more Yes votes for the commission plan today, as Senators Tom Coburn and Mike Crapo announced their support -- not because they like all the details, but to avoid a disaster. Or, as Senator Coburn calls it, "a day of reckoning."

"I am scared to death at the potential that could unwind this country far greater than anything we've ever seen before and far sooner then anybody imagines," he says. "And we have to send a signal to the international financial community."

Because we depend on other nations to loan us money. Almost 40 cents of every dollar we spend is now borrowed. So, by 2020, the US will be spending one trillion dollars a year just in interest on the debt.

By 2025, every single tax dollar will be consumed by interest, Medicare, Medicaid and Social Security, leaving nothing for anything else.

"And we don't have any money left over," says economist Doug Holtz-Eakin. "So that things we think of as government -- building roads, educating our kids, national defense and securing the borders -- there's no money for that."

And he notes that being that far in debt sends us down a dark economic road. "We do face a future that looks like stagnation, high unemployment, low wage growth, and a real problem with inflation and high interest rates."

Diane Lim Rogers of the Concord Coalition says there might be more support if people think about the repercussions "if people realize that it will come out of their kids' pockets one way or the other."

"If we don't start paying for our own bills, our kids will pay for it," Lim said.

One anti-deficit campaign uses a fictitious presidential candidate, whose name sounds like huge debt, to make the same point.

On the screen, a politician named Hugh Jidett walks through a coffee shop and stops at a toddler as he says, "I'm Hugh Jidette and I say, let's keep borrowing and stick our kids with the tab."

An amusing but accurate picture of how politicians have dealt with this issue. And "sticking our kids with the tab" is exactly what will happen if we don't change our ways.

If you ask people if they're willing to give up any benefits or tax breaks, naturally they'll say no.

But that's not the question. The question is whether they're willing to give up something in order to avoid saddling their children with massive debts and a financial disaster. No one doubts that will come if action isn't taken and taken soon.

VIDEO: Jim Angle's story on Special Report with Bret Baier