Warren Buffett Delivers Warning on U.S. Debt

Buffett notes that the nation's "net debt" (the amount held publicly) is increasing at a rate of more than 1% per month, and will have climbed, by the end of the fiscal year, to about 56% of G.D.P. from 41%. "Admittedly," he writes, "other countries, like Japan and Italy, have far higher ratios and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this one and we will find out."

"Once recovery is gained," he writes, "Congress must end the rise in the debt-to-GDP ratio and keep our growth in obligations in line with our growth in resources.... With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can't come close to bridging that sort of gap."

-- Written by Ty Wenger in New York

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