There is less and less appetite from those countries that have purchased U.S. debt at the bi-weekly auctions of Treasury notes, bonds, etc. At the last couple of auctions, the number of prospective buyers that showed up to bid dropped by more than half, from 43 earlier in the year to 20 most recently. China has also made no secret of their flagging interest in any further investment in U.S. paper. They have officially notified both the State Department and the Treasury Department twice in recent months. Our "credit card" is at it's limit.

There are only two or three possible solutions to this conundrum...

-- The country has to begin spending less than the tax revenues it takes in.

-- Or, revenues have to be increased to match the level of spending. Simply put, a tax increase.

-- There might be a third possibility. The Congress could simply authorize the Treasury to begin printing money for them to spend. The reduced value of the dollar will cause even less interest among foreign buyers of our debt. And it would result in a fast and dramatic increase in both interest rates and the rate of inflation. The result of increasing the money supply won't be hard to miss.

I've analyzed the makeup of tax revenues on this board before. The bottom line is that even massive increases in corporate taxes, import duties, fees, and the like can't even come close to bridging the deficit gap. Our revenues are predominantly personal income taxes.

So, I'll leave it to you to figure out what will happen. By my reckoning, it'll have to happen soon. If you see interest rates begin to rise noticeably and the value of the dollar continuing to decline, read that as a signal that the buyers of our debt are going to demand more and more in interest payments to attract them to our debt. If you read that the U.S. dollar is being abandoned as the currency that OPEC will accept as payment for oil, you'll know that disaster has struck. It won't be hard to figure out when it happens. If you see inflation escalating and the money supply increasing, it'll be safe to assume that Congress has decided to neither cut spending or increase taxes. They will have chosen the easier but far more expensive alternative--printing more money.

Note that the Congress has not yet even begun to address President Obama's budget proposal. That might be the time--hopefully--when some serious cutting and slashing of proposed expenses will happen. Along with that--again hopefully--the PayGo provisions of federal spending that were enacted in 1991 but permitted to lapse in 2001, will be permanently re-enacted.

This is going to be a wild ride.