This is the Cato Daily Podcast for Wednesday, July 13, 2011. I'm Caleb Brown.

The wrangling in Washington over raising the federal debt limit

masks the real problem. That federal spending is rising at record speeds.

Mike Tanner, Senior Fellow of the Cato Institute, says most Republicans in this debate aren't even asking for

half a loaf.

People talk about the catastrophe that will occur if we don't raise the debt ceiling and certainly would be

difficult. It would not be a default. The US brings in more than enough revenue

every month in order to pay the interest and principal due on the debt. We continue to be able to pay

Social Security, Medicare, military pay, but we'd have to have about a 44% reduction in

government spending, taking us back to say 2003 levels of spending, a time

not known for mass starvation and economic collapse, but it would certainly pinch.

A lot of people who are counting on paychecks from the government or contractors and people who rely on certain programs would certainly be hurt.

And no doubt the interest that would be charged in our debt would go up adding

perhaps a hundred billion dollars or more to our debt payments every year.

That said failure to get spending under control is liable to lead to a real economic collapse down the road.

Our creditors, the Chinese and others, are not going to forever be willing to buy US debt as we pile

debt upon debt.

The way this discussion has occurred, it definitely does treat this raising of the debt ceiling as the only crisis worth discussing.

People don't understand just how big our debt crisis is.

Surely in technical numbers, our debt situation is worse than that of Greece.

Our deficit is a higher percentage of GDP.

Our total unfunded liabilities are a higher percentage of GDP. Our total unfunded liabilities are a higher percentage of GDP than is Greece.

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