I usually don’t write about the economy, but, like many Americans, particularly those planning for retirement, I am becoming quite concerned about the next ten years or so. There are a number of things that I find alarming.

My first major concern, one shared by tens of millions of Americans is that the size of the federal deficit, reckoned by some to approach $1.8 trillion within the next year or so, is going to cripple credit markets and reverse any positive trends that are beginning to appear.

The U.S. government is like the 900-pound gorilla; it can completely dominate credit markets if it needs to borrow. When one begins to talk of needing trillions of dollars, that gorilla gets to be rather frightening. Whatever one may think of congressional action over the past several years, one thing seems to be relatively clear, Congress cannot control the growing deficit.

My second concern is the great dependence of both public and private debt markets on foreign creditors. For years now the federal government and private borrowers have become addicted to borrowing from foreign countries, particularly China. At the same time, we have become increasingly at odds over a host of human rights, trade, and political issues with China.

It is bad enough to borrow from friends. To borrow from a country that is, at best, a questionable ally, seems to me to be dangerous if not idiotic. Defenders of our growing indebtedness to China who say that the Chinese cannot let the U.S. economy fail may be right. But what if they’re not. And what will we do if China decides to flex its not inconsiderable economic power to teach us a lesson?

My third very serious concern is that the fallout from Wall Street’s financial shenanigans isn’t over yet. We are still reeling from the effects of the crash of the subprime mortgage markets. But Wall Street didn’t limit its activities to that one market. There’s still an enormous amount of debt outstanding for commercial real estate loans and the billions of dollars borrowed by hedge funds to finance their orgy of corporate takeovers in the past decade.

If credit markets tighten because of the size of the federal deficit, or the economy does not recover quickly enough in the next few years when these loans become due, how will they be able to be repaid or refinanced? And if they default, how much more of America’s corporations will be in trouble?

Finally, we cannot afford to forget the current economic crisis that is causing so much grief to state governments, including Kansas and Missouri. At some point, budget cutting will have to stop unless we are prepared to literally shut down large parts of state and local governments. The alternative to such a dire situation is to raise taxes, an alternative rejected by millions of Americans already financially overburdened and on the edge of economic disaster. How will the American economy and the financial markets react to one or more states declaring insolvency?

My great fear is that it may already be too late to avert more financial disaster. But, certainly, if Congress, state legislatures, and the thousands of financial and economic experts do not begin to seriously address the dangers still out there for the American economy, then I cannot imagine how we will not avoid more serious economic troubles. Americans are, by nature, optimists. But optimism must be accompanied by realism and by planning.

— Mike Hoeflich, a distinguished professor in the Kansas University School of Law, writes a regular column for the Journal-World.