Does the United States have too much debt?

In an economic downturn, everyone's reexamining how much debt they have...and how to reduce it.

But what about an entire country?

Berkshire Hathaway CEO Warren Buffett, who has the reputation for being a financial oracle and backs his claims up by being Forbes' richest man in the world in 2008, wrote a New York Times op-ed on Tuesday to warn the public about the enormous amount of debt the U.S. government continues to pile up -- $1 trillion alone since Obama took office.

He writes:

The United States is spewing a potentially damaging substance into our economy — greenback emissions. To be sure, we’ve been doing this for a reason I resoundingly applaud...the [financial] crisis required our government to display wisdom, courage and decisiveness.

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The United States economy is now out of the emergency room and appears to be on a slow path to recovery. But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects.

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Slowing [the federal government's printing presses] down will require extraordinary political will. 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.

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There is nothing evil or destructive in an increase in debt that is proportional to an increase in income or assets. As the resources of individuals, corporations and countries grow, each can handle more debt. The United States remains by far the most prosperous country on earth, and its debt-carrying capacity will grow in the future just as it has in the past.

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We don’t want our country to evolve into the banana-republic economy described by Keynes.

Buffett's measured take? Once we deem the country "recovered," we must keep our growth in obligations in line with our growth in resources.

In New York City, there is a "National Debt Clock" that measures how much the nation's total debt and how much each family is responsible for. (It's been around since 1984, and has outlived its creator.) In fact, it's growing so large that the debt figure won't fit on the clock anymore.

(By the way, as of this post's publication, the national debt is $11,726,594,754,347.95, or $11.7 trillion.)

But some argue that the national debt is good. Economist David Reaume, writing in the Anchorage Daily News, says the national debt figure is less of a threat and more of a bogey man:

The notion that the national debt places an unfair burden on future generations is largely, not entirely but largely, political hooey! Let me say that again: the U.S. national debt should never be paid off. In fact, a worldwide financial disaster would be triggered if more than a fairly small fraction were ever paid off.

Why should the debt never be paid off? Because businesses and investors all over the world must have a nearly risk-free asset in which to invest in order to counterbalance the more risky assets in which they also invest.

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Unless the national economy actually declines for a generation or two, our grandchildren's generation will be richer in the aggregate than we are now, and as long as federal deficits are not too far above optimal, they will be just as able to afford higher taxes as we are to pay those now on the books.

Should the national debt subscribe to the same rules as our personal finances? SmartPlanet sister site MoneyWatch notes that if your income isn't growing, it's prudent to pay down your outstanding debts.

In fact, MoneyWatch editor-at-large Jill Schlesinger writes that taxing wealthy Americans wouldn't achieve much in the long run: "My read of the tape signals higher interest rates, higher inflation and higher taxes for a much larger group of Americans," she writes.

Pay off the debt, or simply balance it: what's your smart take?

Editor's note: Don't forget that debt is only half the equation. Our national deficit is expected to top $1.8 trillion this year. That's the real gap to overcome.

This post was originally published on Smartplanet.com