The sovereign debt bomb is ticking — and time is running out before it goes off.

On November 3rd, while the American people were soaking in the results of the Republicans’ historic rout of congressional Democrats, the Federal Reserve had its long-awaited meeting to discuss the implementation of “QE2”, or the second round of so-called quantitative easing.

The central bank ultimately announced its intentions to purchase of $600 billion of treasuries over the next eight months. According to the Fed, “To promote a stronger pace of economic recovery and to help ensure that inflation, over time, is at levels consistent with its mandate, the Committee decided today to expand its holdings of securities.”

Americans for Limited Government President Bill Wilson, however, is skeptical of the Fed’s motivations for making the purchases. He believes that the real reason is to paper over the debt.

Wilson said, “The Federal Reserve’s reckless program to purchase $600 billion of treasuries over the next eight months is taking the U.S. into uncharted waters, where the nation’s central bank will be the largest holder of the national debt in the entire world next year. The Fed already holds $834 billion of treasuries, and was already on pace to have over $1 trillion in treasuries by August, 2011, more than China, Japan, or any other foreign creditor.”

Wilson continued, “With another $600 billion on top of the Fed’s expected trillion-dollar stake in the debt, the signal we are sending to the world is that the way to pay for our obligations is to print a ton of new money.”

That would bring the Fed’s stake in the national debt to about $1.6 trillion in just the next year. In comparison China only holds $868.4 billion of the national debt as of August 2010. Japan has $836.6 billion.

So, why wasn’t the trillion dollars of purchases already planned enough? Wilson explains: “In the next three years alone, $5.2 trillion of debt will be coming due. In addition, the Obama Administration plans on increasing the debt another $3.6 trillion over that same period. That means that the Treasury has to sell $8.8 trillion of debt over three years, or $2.93 trillion every year.”

But, that “$2.93 trillion a year is more than the Treasury has ever had to sell,” Wilson noted, adding, “Approximately $630 billion more than it has ever sold. So it is little surprise that now the Fed is coming out saying it is buying another $600 billion of treasuries. This action by the Fed has nothing to do with ‘a stronger pace of economic recovery,’ as the central bank claims. It has everything to do with the fact that we are broke, and we’re printing money to pay the bills.”

So, the nation, after decades of being warned that the national debt is unsustainable — it now totals $13.6 trillion — has finally reached the point where it cannot sell enough treasuries just to roll the debt over. So the Fed is just going to print the money.

Wilson believes that time is running out to change this trajectory, and that Congress has to act. He said, “It is up to the newly elected Congress to rein in Washington’s unsustainable fiscal trajectory so that the possibility is eliminated of further Fed purchases of the debt. Otherwise, they will be signing up to have the U.S. triple-A credit rating downgraded, and will preside over the decline of the nation as an economic superpower.”

What can be done? Wilson explained, “Spending must be cut, and the Fed has to be reined in and audited. The very solvency of the Treasury is in danger, and only Congress can reverse course and begin to pay down the debt, before it is too late.”

The consequences of inaction are clear. Besides the Fed becoming the lender of first and last resort to the U.S. Treasury, by the end of Fiscal Year 2011, the national debt will total $15.144 trillion, according to the White House Office of Management and Budget. That’s more than the entire Gross Domestic Product, which currently stands at $14.73 trillion.

And, growing at a rate of $1.06 trillion every year for the next ten years, the economy would have to grow in excess of 7 percent every year to prevent the debt from exceeding 100 percent of the GDP, let alone outpacing the growth of the debt. More likely, the debt will top GDP in the next two or three years, if not sooner.

That is startling. The debt is growing so fast that the economy will not be able to grow out of this crisis. It is this very fiscal and monetary recklessness by government that has the American people up in arms.

Now, with the sovereign debt bomb ticking away, it is up to new members of Congress to do something — before it goes off.

Robert Romano is the Senior Editor of Americans for Limited Government (ALG) News Bureau.