Bond buyers have been remarkably compliant in allowing the U.S to fund its $15 trillion national debt at low interest rates. However, if the U.S. continues to add a $1 trillion or more annually to the national debt, the consequences for the economy could be disastrous by the end of the decade. If Obama wins the election, the U.S. is almost certain to continue down a path of huge annual deficits. However, if Romney wins would he really cut spending enough to avoid a fiscal calamity? Or would his legacy by closer to that of Geoge W. Bush, who ran up $4.9 trillion in debt during his two terms in office.
Mitt Romney claims the he will keep the U.S. from becoming like Greece, Spain, or Italy, but for the most part has only made vague claims on how he would cut the budget. His platform promise to increase defense spending by $2 trillion over the next ten years requires painfully deep cuts in entitlements if he is to make any real progress on reducing the deficit.
The vague promises that Romney has made to cut spending will not give him a mandate to slash entitlement programs. Given the current stalemate in Congress, it seems unlikely that he would be able to push through much in the way of budget cuts, unless the Republican party gains control of both the House and the Senate. And even if the Republicans gain control of Congress and the Presidency, it seems doubtful that they truly have the political will to make the types of deep cuts to entitlements that would be required to close the budget gap. Thus, it seems likely that regardless of who is President, the U.S. will continue down a path towards fiscal calamity. However, a candidate that talks a good game of fiscal responsibility is probably a better choice than one that does not even have it on his agenda.