Experts: U.S. Gov't Must Craft Plan to Control Debt

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Budget experts say the U.S. government will have to come up with a plan to get its ballooning debt under control or face a possible panic in financial markets.

Reuters reports changes will have to be put in place by 2012 in order to keep the debt load to a manageable 60 percent of the overall American economy.

The national debt has more than doubled since 2001. That is due to several rounds of tax cuts, a bad recession and the wars in Iraq and Afghanistan. And retirements drawing near over the coming decade are expected to make the situation worse.

"The national debt currently accounts for 53 percent of GDP, up from 41 percent a year ago. That's likely to rise to 85 percent of GDP by 2018 and 200 percent of GDP by 2038 unless dramatic changes are made," said members of the Peterson-Pew Commission on Budget Reform.

The only solution experts recommend is tax hikes and spending cuts. They said unless the U.S. takes swift action, the value of the dollar may continue to fall and interest rates will be forced back up.

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