Have you heard the news? Mailboxes everywhere may soon be filled with checks from the US Treasury. Yes, you have won the lottery, George W. Bush/US Congress style. The concept is simple – we can purchase our way out of an economic slowdown and make the people in Washington look good. Only our elected officials in DC could spend time coming up with this plan, as they center most of their time on whether Roger Clemens should be sworn in before he testifies.

And, you know what else? All they want you to do with the money is spend it!! This is a free lunch and a lot more. Your federal government is about to spend $250 billion dollars handing out checks to the taxpayers. Who hates the government now? George Bush should be your hero, right?

Not so fast.

Do you pay your credit card bills each month? Some of us pay only the interest charges as we fight to manage our overall debt load. This practice leaves the principal amount due unchanged. And, of course, we all still use our credit cards each month. So, the amount of interest-only payments never goes down. It is a secret all of us hate to think about – how to find the money to get past the interest charges.

It is no different for our federal government. Each year our government spends a lot more than they have to spend. So, they get more credit. A lot more credit. Let me give you some numbers.

The money for these so-called stimulus checks will be borrowed from foreign governments. $250 billion dollars. And, you know what else? The budget for 2008, which runs to September 30, 2008, was $250 billion in the negative before the stimulus package was agreed to. And, this figure fails to take into account any other projects Congress decides to pay for before the new budget year starts.

And, where do you think our presidential candidates stand on the issue? Well, John McCain said last week, “The issue of economics is not something I’ve understood as well as I should.” Great. He also said that the time is ripe for spending restraints. Right. Senator Obama says his plan for $250.00 tax rebates will solve everything. Mayor Giuliani awoke in Miami to say that his time as Mayor of New York had equipped him to handle economic crises. Yeah, and Dorothy and Auntie Em’s house didn’t land on that witch.

Most of the so-called economists have made it very clear that we are not going to spend our way out of this alleged crisis. Not one has said that the infusion of these funds will bring a quicker solution to what ails this economy.

And, the honest ones have said that providing relief to those on unemployment is a better way of getting money out into the economy. Try and get someone from the Heritage Foundation to confirm that. On the other hand, soon-to-be retired Pete Dominici (R-NM) actually said he would like the stimulus to reach $300 billion and that sending checks to those that didn’t pay taxes because of their minimal income wasn’t a bad idea. Too bad Bush didn’t agree with him.

Now, we have to return to the issue our national credit card debt and our interest payments thereon.

See if you can comprehend this set of numbers: the National Debt has continued to increase an average of $1.48 billion per day since September 2006. The credit card debt of the US government is over 9 trillion dollars. Trillion. Some say that we also have a credit surplus from two sources – our social security trust fund has a little over $2 trillion extra at the moment, and Medicare has a surplus of over $3.6 trillion.

So, we have a $3.4 trillion dollar debt, if and only if you let us use your surpluses to pay against it. Most economists use the 9 trillion dollar figure as the correct one. Do you think we ever pay down that debt? NEVER. We spend over $450 billion dollars a year just making the interest payments! Read that again - $450 billion in interest payments.

Now, let me tell you where the money comes from. Every three months our government sells bonds. Believe it or not, the guys and gals who run the social security and Medicare systems, as noted above, are the major lenders back to the government. These two groups hold over 50% of the debt.

Our friends overseas hold the rest – Japan holds $644 billion; China holds $350 billion; the oil exporting countries own $100 billion in our notes. I wonder where Saudi Arabia got the money to buy those bonds?

Of course, it goes both ways. A lot of American investors have made investments in foreign countries. But, Warren Buffett just noted in his famous annual letter to shareholders that 2007 marked the first time since 1915 that the net balance of this investment turned negative.

“Foreigners now earn more on their U.S. investments than we do on our investments abroad,” Buffett wrote to shareholders “In effect, we’ve used up our bank account and turned to our credit card. And, like everyone who gets in hock, the U.S. will now experience ‘reverse compounding’ as we pay ever-increasing amounts of interest on interest.”

"I believe that at some point in the future U.S. workers and voters will find this annual 'tribute' [of interest payment on the debt] so onerous that there will be a severe political backlash," Buffett wrote. "How that will play out in markets is impossible to predict – but to expect a 'soft landing' seems like wishful thinking."

In 2006, the government spent $406 billion of your money on interest payments to the National Debt. Compare that to NASA at $15 billion, education at $61 billion, and the Department of Transportation at $56 billion.

Enjoy your stimulus check; you will be paying for it for the rest of your lives.