The handwringing over the supposedly disastrous consequences of our growing national debt shows no sign of abating anytime soon. Perhaps most troubling is that the unwarranted alarmism comes not just from rabid ever-grizzlies like ZeroHedge but also from some respectable information sources.

At every turn, the Cassandras remind us that the US has total outstanding national debt of $11.8 trillion and $3 million of new national debt every minute. (They conveniently fail to mention that that's only a 100% increase in the debt since 2001.) They seem to get satisfaction from pointing out that the debt is so large, it doesn't even fit on most calculators.

And they note that even according to the conservative estimates of the Obama Administration, the federal budget deficit in 2009 will be $1.6 trillion, over 11% of the overall economy, the highest on record since the end of WWII. And that in 2019, the national debt will represent over 75% of GDP, the highest proportion since just after WWII. They claim that, in these circumstances, the international reserve status of the dollar will not survive, leading, at best, to a crippling rise in interest rates and the cost of debt service, and at worst, a collapse of the American monetary system. Either way, they claim, the US economy will "teeter on the edge of a black hole."

Defeatist data like these are causing pundits and ordinary folks alike to start thinking about the issue -- never a good thing. It's clear the debt hysteria won't ebb until either Americans are distracted by a new reality show or the experts debunk the myth that debt is bad.

Fortunately, Congressman Pete Stark has gotten the ball rolling by noting that the national debt is actually an indication of our country's wealth (before politely telling his interviewer to "get the fuck out or I'll throw you out the window"). And Nobel-winning economist Paul Krugman has helped out by suggesting that national debt doesn't really matter.

I fear, though, that these lone voices of fiscal sanity won't be enough. So, in an attempt to break down the facts in a way that a six-year-old -- or even Tyler Durden -- could understand, I've composed clear, straightforward answers to frequently-asked questions on this much-misunderstood topic. Feel free to add any queries not addressed, but I think this pretty much ends the debt debate.

(However, if after reading the FAQs you're still a bit anxious about the debt, you're in luck. The Treasury Department has been kind enough to allow concerned citizens to make a "gift" to the government to reduce the debt.)

FAQs About The National Debt

"Will the growing federal deficits increase the US's borrowing costs, creating a vicious cycle of spiraling debt?"

Once upon a time, people thought so, but recent economic history has proven that theory wrong. In fact, debt and borrowing costs enjoy an inverse relationship. For example, in the past few years, the national debt and deficit have skyrocketed, but interest rates have plummeted to record lows. Ergo, the more debt we assume, the lower our borrowing costs will be, which will allow us to access funds to service the balooning debt at ever-cheaper prices. By my calculation, if the US had the good sense to increase its debt by a few trillion more, we could reach a point where investors pay for the privilege of lending us their hard-earned cash.

"Doesn't a massive federal deficit mean we're spending much more than we produce?"

Absolutely. That's the beauty of it -- you get to spend money like a drunken sailor even though you're on a drunken sailor's salary.

"Won't investors stop lending to us altogether at some point?"

This is America. Governments, corporations and individuals in this country and around the world are lined up around the block waiting patiently to throw money at us. Since the queue's end isn't even visible from here, there's no reason to believe it actually has an end.

"Don't sound principles of personal finance dictate that it's unsustainable for an individual to continue borrowing and spending more than he earns?"

Yes. In short order that person's credit rating will fall, which will require him to pay more to get additional credit. At some point -- and it won't be long -- lenders will refuse to provide any more credit. If he isn't able to increase his income to meet his debt service obligations and other expenses, he'll go bankrupt.

"Wouldn't the same thing happen to a government that borrows and spends more than it produces?"

Yes.

"So, doesn't that mean the same thing will happen to the US Government?"

No. The economic realities applicable to individuals and other governments don't apply to the US. This phenomenon is what's known as the economic component of American Exceptionalism.

"What makes the US exempt from economic reality?"

A surplus of factors. First, the almighty dollar. For decades it has been the international reserve currency, which is a fancy way of saying the rest of the world has eternal blind faith in our money. In God we trust. In the Dollar they trust.

Second, we have the largest economy in the world, which means the rest of the world knows that a hole in our boat would drag the rest of the world's dinghies to the bottom of the ocean with us. That keeps them cooperative.

And third, America is the greatest, freest, richest, most egalitarian country in the history of the world. We're a beacon to the rest of humanity. We're the modern age's greatest national success story. These colors don't run (except, of course, where the red, white and blue at issue are the colors of France.) And, what's more, we're the greatest. How could a country like that go bankrupt?

"But hasn't China hinted at replacing the dollar as the reserve currency?"

China schmina.

"Isn't China expected to overtake the US as the world's largest economy?"

That's not going to happen any time soon -- at least not for 3 or 4 years. And if and when it does happen: China schmina.

"Isn't deficit spending by the government contrary to conservative economic principles?"

Not at all. Government debt as a means of centrally planning a nation's economy is what laissez-faire capitalism is all about. For those whose French is rusty, "laissez-faire" generally means "let-do," "leave-alone" or "step-the-fuck-off, Uncle Sam". Except when the economy veers off the anticipated course, in which case it means "government-should-intervene-by-sticking-its-arm-up-the-economy's-ass-and-making-it-dance-like-a-hand-puppet". Worry not -- Adam Smith and Milton Friedman are resting peacefully.

"What about the Fed's policy of monetizing the debt by expanding its balance sheet? Isn't that even more dangerous because it finances deficit spending by, in effect, printing money?"

That's what the press is there for. Printing money devalues a currency, sparks inflation and merely postpones an inevitable day of painful reckoning only when third world countries do it.

"Are you sure we've got nothing to worry about?"

As sure as I am that the Obama Administration's deficit projections are right on the money.

"So, debt is, for lack of a better word, good?"

Precisely. Debt is right; debt works. Debt clarifies, cuts through, and captures the essence of the evolutionary spirit. Debt, in all of its forms -- debt for bank bonuses; debt for shiny new cars; debt for that i-Phone app that makes the farting noises of different ethnic groups around the world -- has marked the upward surge of consumerkind and debt, you mark my words, will not only save Ben Bernanke's job, irresponsible homeowners and Citigroup, but also that country with a mild case of economic performance anxiety called the USA.

Mr. Dover will be on a secret fact-finding tour of Europe for the next few weeks.