As can be expected when politicians make projections, the likelihood of them being within $10 trillion is nil. It's fascinating that individual income tax revenue will jump by 32%, and corporate income taxes by 30% from 2009 to 2011. The inconvenient fact that you need a job to pay taxes -- and that corporations need to have profits to pay taxes -- is brushed aside.

I presume they're also counting on a windfall when the Bush tax cuts expire. The largest tax increase in history will surely lead to 4.7% GDP growth in 2011, and 6.0% GDP growth in 2012. Maybe the Cap & Trade Tax and the additional $1 or $2 trillion for the government takeover of the health-care system will lead to a boom in our economy.

But these projections are, at best, pure fantasy. The scary part: Even with these pie-in-the-sky numbers, they still project the national debt to grow by $4 trillion between 2009 and 2014. The real number is likely to be $8 trillion.

The single biggest risk is interest rates. The Congressional Budget Office (CBO) assumes interest rates will stay below 5% through 2019. This is a ridiculous assumption. The Federal Reserve is printing trillions of dollars, we're fighting 2 wars, we've just committed $787 billion in stimulus spending, along with billions to our banks and auto companies -- and now we're about to commit at least a trillion dollars to national health care.

The countries lending us this money will absolutely require higher interest rates to account for their risk. If interest rates don’t approach double digits in the next 5 years, it won't make economic sense. As Bud Conrad from Casey Research points out, just a 1% increase per year over the assumption in the budget will double the debt. The government has pushed this country to the limit of debt-induced growth, and we're no longer in control.

                                  
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Any corporate treasurer worth his or her salt would have been taking advantage of the lowest long-term Treasury rates in decades by locking in debt for 20 to 30 years. Not our Treasury Department: 40% of all US debt rolls over in less than one year; less than 5% of all US debt is locked in for 20 years or more. The average maturity is 50 months -- a 3-decade low.

The extremely short duration of this debt leaves the country susceptible to a spike in interest rates, which could drive annual interest expense from $250 billion to $500 billion virtually overnight.