Obama acknowledged this week the country could face trillion-dollar deficits for years to come. He has pledged to try to rid government of wasteful spending and to look at ways to address costly entitlement programs such as Social Security and Medicare.

I have a new business plan in the works.  I live in a small town that has just had a big influx of 30 year olds, with families, working at our factory at lifetime jobs.  I'm going to set up a bank, and persuade those folks to send me about 5% of their paycheck every two weeks, so I can hold it for them.  I will tell them I will add 5% interest, compounded monthly to the money they send, and after 30 years they can buy the house of their dreams in Florida.

Move the clock forward 30 years.

John Smith takes early retirement, comes to see me and says he is going to take the $500,000 shown on his monthly statement as the value of his account, and buy a house in Florida, on the beach.  I, of course, chuckle and say, how can you do that?  You just have a piece of paper with numbers on it, not actual money.  It takes actual money to buy a house.  Not only that, but your co-workers all want to do the same thing, and I don't have anywhere near that much money to give you.  So, you will have to borrow $500,000 from me, at 6% interest, and $50,000 in loan fees, if you want to buy that house.

John says, but I sent you money for 30 years, I know I have it here.  

So, I say, sure you did, but look at this big bank building we are in.  Your money paid for it.  Look at my house.  Your money paid for it.  Look at how much my employees make.  Your money paid for that.  You can't expect to still have any money, you just have a piece of paper with numbers on it.

Now, what's wrong with my business plan?