Here’s your happy thought of the day.  Even under the most optimistic scenarios of the Obama administration, the US will hurtle towards a debt crisis resembling that of Greece under the proposed spending initiatives and commitments to entitlement plans made by the White House.  The Associated Press’ Tom Raum warns that continued deficit spending could create a real global collapse from a normal recession:

It’s bad enough that Greece’s debt problems have rattled global financial markets. In the world’s largest economic and military power, there’s a far more serious debt dilemma.

For the U.S., the crushing weight of its debt threatens to overwhelm everything the federal government does, even in the short-term, best-case financial scenario _ a full recovery and a return to prerecession employment levels.

The government already has made so many promises to so many expanding “mandatory” programs. Just keeping these commitments, without major changes in taxing and spending, will lead to deficits that cannot be sustained. …

Carmen Reinhart, an economics professor at the University of Maryland and a former IMF official, suggested the nation’s fast-growing indebtedness may not have a visible impact at this point on ordinary Americans. But some day it will pounce.

“One thing we can say with a fair amount of certainty,” she said. “We never know when the wolf will be at our door. The wolf is very fickle and markets can turn very quickly. And a high debt level makes us very vulnerable to shifts in sentiment that we cannot predict.”

Obama demanded fiscal austerity this week … at the same time he lifted the cap on US debt from $12.4 trillion to $14.3 trillion.  The difference between the two is about what the federal government spent for all of FY1999.  It’s half of what Obama proposes to spend in FY2011.  Democrats have raised spending by over a trillion dollars a year since taking control of Congress in 2007.

Which party needs to be told to get serious about fiscal responsibility?

We may rebuild the economy with cheap credit based on a borrowing spree by the federal government, but we’re about to reach our limit on how much we can keep borrowing.  China, which holds a significant amount of our debt, has already begun making noises about dumping it in retaliation for our foreign policy towards Taiwan.  We’re buying our own debt these days just to keep interest low.  It won’t take much more than a single hard push to collapse the financial house of cards we’ve built — and if that happens, the resulting disaster will make 2008-9 look like a picnic.

Americans need to learn that we can’t maintain the Ponzi schemes of entitlement programs we’ve built.  We have to greatly reduce our future commitments and our present spending, and start to dismantle the Leviathan of federal bureaucracy that has exploded over the last several decades.  Otherwise, the only way we will keep from destroying the Western financial system is to become a command economy with property rights and individual choice becoming relics of a golden age long since passed.