Our Debt Binge Is Ending — And The Middle Class Will Get Clobbered

The world is coming to the end of a 50-year debt supercycle, John Mauldin says, and the austerity required to put us back on solid financial footing will hammer ordinary Americans.
Mauldin, a financial analyst and the author of ENDGAME: The End Of The Debt Supercycle And How It Changes Everything, thinks that the the US will soon be forced to confront the fact that it has borrowed way too much in the past few decades and must severely cut back.
The US's $1.6 trillion-a-year deficit, Mauldin believes, must quickly be cut to about $300 billion a year, or the US will face a debt crisis. And given that our current government can barely find ways to chop $30 billion of spending from the 2011 budget, these cuts are going to be painful.
What will the forced austerity mean for ordinary Americans?
Higher taxes and significantly reduced Medicare and Medicaid spending, for starters, Mauldin says. And then cuts to almost everything else in the budget, including military spending and education.
In other words, as has so often been the case in the past couple of decades, the middle class will bear the brunt of the impact.
http://finance.yahoo.com/blogs/daily-ticker/debt-binge-ending-middle-class-clobbered-20110405-094510-405.html