msnbc.com
Senior producer
June 24, 2011
The breakdown of talks between the White House and congressional Republicans has intensified worries about the financial bomb known as the national debt. Without serious budget reforms, that bomb will almost certainly explode — with widespread collateral damage to the U.S. economy and the global financial system.
But no one can say for certain just when the bomb will go off. The fuse may be longer than many people assume.
Debt-reduction talks came grinding to a halt Thursday when Republicans pulled out, blaming Democrats for demanding tax increases rather than accepting cuts in federal services.
The clock is ticking. The Congressional Budget Office said this week that the national debt is on pace to equal the gross domestic product within a decade, and warned of a European-style crisis unless Congress moves to realign the budget.
“There comes a point when you have a reckoning,” said former New York Gov. George Pataki, a Republican who chairs No American Debt. “You see that in Greece. If we don't get our house together we'll be the next country to deal with that.”
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