Short answer: No. But with the United Kingdom being warned by Standard and Poors that the quality of their debt may be downgraded -- meaning their growing debt may increase the worry of default and the risk of lending to the country -- some folks are using the opportunity to get anxious about increasing U.S. debt. The basis of this argument, and most similar ones, is looking only at the 2019 deficit and debt projections, as though there will be no policy changes between then and now. But those projections are extremely uncertain (see this graph) and don't take into account any of the various events that could occur in the next decade, including the potential for both tax reform and tax increases. As the financial system recovers, we can expect that some of the major deficit-increasing expenditures on financial bailouts to return to the Treasury. And, as the president has made clear, as this current crisis passes he expects to take further steps to move closer to a balanced budget. Looking at this graph of deficits and surpluses, it's important to realize that the deficit is dropping in response to policy decisions, and the president and congress will have a chance to move more towards a balanced budget each year. The most important thing to remember is that debt has a purpose. It's purpose is to help pull us out of our current recession. The debt we have now is not the frivolous debt of George W. Bush's tax cuts, largesse lavished on the wealthy at the expense of our fiscal health. The current spending is entirely designed to help the country weather this storm. And even then, as Jon Chait notes, Obama's budget still projects a lower average deficit over the next decade than if Bush administration policies had been continued. Given that, and the fact that our economic security is bolstered by the extraordinary stability of our political and, yes, military institutions, we need not worry that debt will be the undoing of our economy. The real scary challenges, in my view, are figuring out how to reform the financial sector, how to solve our energy problems and, perhaps most difficult in a political sense because it is something that is out of politicians' hands, figuring out what sector will drive economic growth in the coming decades.See Also: Noam Scheiber also tells you to relax. -- Tim Fernholz
