Let's face it: there is no shelter from the fast rising $$ storm.

• Author: Farrell, Lawrence P., Jr.
• Position: President's Perspective

When one thinks of storms, a vision of destruction comes to mind--rain, wind, thunder and lightning. A fiscal storm, too, leaves trails of wreckage.

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Let's examine some of them, and what they portend.

At the very top of the casualty list is the financial condition of the United States. Components of this are the debt, the deficit, the sinking economy and declining employment, One can observe upfront that people are ill-informed about these elements, owing first to their complexity and the fact that our press and elected leaders do a poor job of explaining the facts.

The nation's $1.6 trillion debt is a major concern. Two components of this debt are publicly held--citizen bondholders, China and Japan--and internally held, like the Social Security Trust Fund. With a GDP of almost $16 trillion, the United States owes more than 100 percent of one year's GDP (think Greece). And with real unemployment disguised by arcane counting rules, U.S. government reporting greatly understates the depth of our employment crisis.

Next is the deficit, projected by the president's budget to be $1.3 trillion this year. When one looks under the hood, this is truly frightening. The federal budget has two elements, mandatory spending (Social Security, Medicare, Medicaid, interest on the debt) and discretionary spending, which includes the budgets of every federal agency. Even if one eliminates the whole federal pie, receipts are still insufficient to cover the deficit. So calls to bring down defense spending and raise taxes on a few high earners do not address the structural shortfall. Much bigger adjustments in the mandatory portion of the budget must be formulated and implemented. By the way, as the Budget Control Act of 2011 brings down discretionary spending, the percentage of the budget consumed by mandatory entitlements continues to grow.

Notably, the current level of unemployment appears to be structural in the sense that the lower value-added jobs have been shed by both industry and government. These positions are not coming back. One encounters employers every day who are seeking highly skilled employees, but they are not to be found in the ranks of job seekers. Our education system, from high school through college and especially community college and vocational education, is not preparing young people for the higher tech jobs of the present or the future.

Both the country and defense are teetering on the brink. The Congressional...