For years, Americans have been conditioned to worry about federal deficits. Congress and the President, we've been told, should strive to balance the federal budget every year. When annual deficits got big, there was hand-wringing. When Bill Clinton left office with a federal surplus, there was celebration.

But by worrying only about annual red ink, policymakers have ignored a far larger problem - the now-looming federal debt that is growing by the day.

New Yorkers in particular are reminded of this every day. The city is, after all, home to the government debt clock, the digital billboard that keeps track of our massive, mounting obligations.

Even before the economic downturn, the government had debt that was expected to grow over the years as a share of the economy. Now, the projections have become staggering: Under reasonable assumptions about what policymakers are likely to do on tax and spending policies in the next year or so, the nation's debt will likely grow to 100% of Gross Domestic Product by 2022.

In other words, we'll owe loans that are equal to the entire value of all the economic activity generated in the United States in a given year. Soon after that, our debt would surpass levels seen just after World War II, when it reached 109%.

Yes, we recovered and prospered after that war. But times were different then - that government debt was owned nearly entirely by domestic investors, including everyday Joes and Janes who stepped up patriotically to help pay for the war.

What's happening today is a formula for crisis.

First, because about half of our public debt is held by overseas investors. Without action in Washington, we could someday see a headline like this on the Daily News' front page, "World to U.S.: Drop Dead."

Second because, as with your personal credit cards or mortgages, the government cannot borrow for free. It must pay interest. Interest payments, now at 6% of the budget, will grow to 15% by 2018, squeezing out other budgetary priorities.

Our creditors have traditionally seen the United States and its debt as a secure investment. But as concerns about our fiscal stability grow, investors may not want to buy more U.S. debt. The U.S. Treasury would then have to raise interest rates on U.S. bonds to attract the funds we need, further increasing the interest burden on the budget. It could become a vicious downward economic spiral.

It is not just the government that will pay more if this happens. Families and businesses will have to pay more, too. Everything from mortgages to school loans will cost more. So will business loans. Companies may not be able to borrow money to expand their operations and entrepreneurs may be less likely to start new small businesses, the source of most new jobs in our economy.

Copyright 2009, New York Daily News