I am worried about our out of control debt and spending problem as a country. The only reason we get away with just printing more money to buy the debt is we are the world's reserve currency so we command some extra respect. What if Greece could just print their own money to buy their debt? It just doesn't add up long term.
Buck up man.
The debt is leveling, not "out of control":
The deficit is falling:
Interest payments look pretty darn good:
No one knows how this is all going to play out, but if you own and invest in productive assets, you'll be fine.
No, the debt is not leveling out, it continues to grow. Rosy situations have the debt RELATIVE TO GDP stabilizing, but this anticipates robust GDP growth at rates we have not seen and still expects the debt to grow. Given the historically low labor-force participation rates and stagnating income, it's difficult to see where this growth is expected to come from. And none of these projections anticipate any sort of slow-down or reduction in growth as is typical in ordinary business cycles.
The deficit falling does not equate to a reduction in debt and indeed the debt is expected to spiral upward.
Interest rates are at artificial lows thanks to unprecedented bond buying by the Federal Reserve through QE. The Federal Reserve currently owns roughly one third of the US bond market. Now that the Fed has announced tapering, we'll eventually see interest rates creep back up. Given that so much of our debt paid for simply by purchasing more debt, a small uptick in rates will have enormous consequences for debt projections.
While owning productive assets ensures some value will be retained, it doesn't prevent a sudden and severe drop in portfolio value should a crisis arise.
Implicit in all these very pessimistic comments is that we don't know what will happen in the future. Growth could keep coming (like it has for decades) or maybe it will stop. Interest rates might rise or they might fall (especially in the zero growth scenario you describe). The deficit may keep falling and even go into surplus, or it may not. Even Nobel Prize winning economists are incredibly poor at predicting these things, so it's probably not worth trying to read the tea leaves.
As for owning productive assets, yes, the value of your portfolio could temporarily fall, but that's the nature of investing. You earn long term yields in compensation for asset price volatility. But like the recent Buffet piece described, if you own solid, income producing assets, you'll do well over the long term in basically every scenario, no matter what Mr. Market claims your assets are worth along the way.
What's the alternative that you propose? Curl up in a fall-out shelter clutching a bar of gold muttering about fiat currencies?
Build an all weather portfolio comprised of stocks, bonds, real estate, and hey, maybe even a little gold. Be optimistic. Even if things turn out poorly, there's no profit from fretting about all the possible negative outcomes in the meantime.