How dangerous is the national debt?

So why are interest rates still relatively low if the government keeps borrowing more and more money? The answer is that much of the money Uncle Sam gets these days is coming from foreign countries where U.S. Treasuries are still seen as one of the safest pace to stash cash. Rates are low here largely because a growing global economy keeps generating cash to fund more U.S. borrowing.

That’s OK as long as the global economy keeps humming along; history tells us that doesn’t go on forever. But even if the economy remains strong as far as the eye can see, one of the biggest bills in U.S. history is about to come due when baby boomers hit their peak Social Security and Medicare years. So now would be a great time to sit down and review our national retirement program — just as individuals do periodically with their own personal finances. Unfortunately, a political debate over the role of government in managing retirement and funding health care has given Congress and the White House a cover for ignoring this very real debt bomb.

As Federal Reserve Chairman Ben Bernanke recently told Congress, the best time to get started addressing the problem was “10 years ago.” There’s still time to fix it. But ignoring the problem — just like hanging up on the debt collector — is not a great way to go.

Regarding (the recent) bomb scare in Boston — how does the city come up with a figure of $1 million from this?  I understand if they paid for more officers with overtime pay, but does this figure include salaries that would have been paid anyway?
-- Jim S.. Round Lake, Ill.

The now infamous publicity stunt by Turner Broadcasting’s Cartoon Network — a “guerrilla” marketing campaign involving suspicious-looking, lighted circuit boards — was hardly “all in a day’s work” for the city’s first responders. Reports of dozens of sightings of the devices touched off a full mobilization of the city’s security and emergency crews, including federal agents, bomb squads, hundreds of state and local police and the U.S. Coast Guard. Roads, bridges and part of the Charles River were closed for several hours.

When the dust — and the company — settled, the Massachusetts attorney general sent Turner a $2 million bill for the city’s troubles. Some media analysts noted that the ensuing national publicity for the cartoon (whose name escapes us at the moment) was well worth the money; $2 million wouldn’t even buy a 30-second spot on the Super Bowl.

But it’s also now clear that terrorizing a city is probably not a great advertising strategy: ratings for the cartoon barely budged in the week after the stunt. On Friday, the head of the Cartoon Network resigned over the fallout.

So where did the money go? Total “out of pocket” costs came to $578,766, according to the attorney general's office, which negotiated the settlement. The biggest bill was presented by the Massachusetts state police, which said it spend a nice round $200,000 on the event. The city government claimed $140,232 in expenses, while Boston’s transportation authority, the MBTA, figured it lost $182,426. That included an estimate of lost fares after subways were shut down and the added cost of hiring buses and drivers to provide alternate transportation. The neighboring cities of Somerville and Cambridge also worked up their own bills.

Once talks over the cost began, the city apparently decided that a financial penalty — above actual costs — was called for. So the total bill included $421,234 in “additional restitution funds” and another $1 million in “Homeland Security and Community Initiative funds.”

As of last week, the two guys charged in the “hoax” were reportedly working on a settlement of their own.

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