Given the economic situation at hand, the word "insolvent" might be nominated as Word of the Year (2008, 2007). However, given all the attention to that word -- which basically means one is unable to cover financial obligations -- I'm not sure why more people aren't a little more concerned about the idea that our government itself may be, in effect, insolvent, and becoming more so every day.

Consider the trillions committed for economic stimulus and bailout purposes. We already owe trillions (including $1 trillion to China). Recall that private enterprise, real estate, and consumer spending all bring in the tax revenues that the government requires to fund its initiatives if it had a balanced budget. Needless to say, tax income is dwindling as the economy stumbles and teeters on the brink of even more serious damage.

And yet the government is committed to spending even more, which means borrowing more and/or firing up the printing presses, making some decisions that could cripple many businesses and drive some overseas -- not to mention hurt already beleaguered consumers. Anybody who realizes money doesn't grow on trees or get delivered by storks (in the case of trillions, flocks of storks I guess, or maybe Monsanto's (NYSE:MON) working on genetically modified super storks) should be very concerned.

Same economic story, different administration
I took a lot of heat for a recent article expressing concerns about President Barack Obama's economic policies, although I tried to make it clear that I had been none too pleased with policies under former President George "This Sucker Could Go Down" Bush's administration either, which I referred to as a massive mugging. I was simply pointing out a continuation of terrible economic blunders that we can ill afford in the face of an admittedly scary economy, an economy that desperately needs to correct itself from the artificiality of several back-to-back asset bubbles.

For what it's worth, in my book, expanding government, spending taxpayer money, and digging us into a huge debt hole for defense spending is most certainly not "better" than expanding government, spending taxpayer money, and digging us into a huge debt hole for social programs that likely won't result in real, long-term economic growth. I find war spending far more odious, but neither should come to pass, especially with the kind of fiscal black hole our government has been digging with a Keynesian shovel -- although admittedly, even John Maynard Keynes didn't condone governments indulging in deficit spending in supposedly good times like the Bush administration did.

Last year's documentary I.O.U.S.A., which featured well-known people in government and business like Alan Greenspan, Paul Volcker, Ron Paul, and Berkshire Hathaway's (NYSE:BRK-A) (NYSE:BRK-B) Warren Buffett, pointed to an overburdened and unsustainable situation even before all the bailout madness really picked up steam. The National Debt Clock ran out of numbers, folks. That was meant to be a wakeup call: We were already over our heads!

Of course, people can argue all they want about "this guy versus that guy," and why "we shouldn't question this new guy's economic policies because he's so much better than the last guy," or "this political party's my political party so they're OK no matter what," and "gee, do we ever hate those other guys!" Maybe some people find all that team mentality as comforting as six-packs and Monday Night Football, but I think it's all a silly distraction that distracts people from thinking about the real issues. And as far as I can tell, what the real issue is: Where's the money, and where's more of it going to come from?

Beyond the banks
Many people are already well aware of the fears that huge banks like Citigroup (NYSE:C), Bank of America (NYSE:BAC), and Wells Fargo (NYSE:WFC) up to their eyeballs in risky loans that are rapidly defaulting are basically insolvent. Meanwhile, the consumer climate makes dying dinosaurs like General Motors (NYSE:GM) even sicker, and of course its own debt load's nothing to sneeze at.

But all that's child's play when you ponder our government's cash burn and burgeoning obligations.

The $3.6 trillion budget President Obama recently spearheaded includes a near-term deficit of a mind-blowing $1.75 trillion. While he vows that the deficit will be halved later, that seems built upon some rather rosy economic recovery projections coming to pass, and if industries become increasingly beleaguered (and businesses provide jobs and tax revenues, folks), then I think you can see why this might present a problem down the road.

Meanwhile, the National Debt is currently just under $11 trillion and growing. You can't just keep adding debt while GDP declines, and raising taxes will strangle already beleaguered businesses and citizens. The Federal Reserve is firing up the printing presses, but that brings to mind the very real risk of hyperinflation.

Last but not least, I hope nobody missed the fact that last week China expressed concerns about the U.S. being good for its debt to that country. If that doesn't scare you -- and support the thesis that there is major reason for concern -- I don't know what will. Meanwhile, France and Germany balked at spending for their own stimulus plans. Um, hello?

Fasten your seatbelts
Unfortunately, the government's overheated spending, relying on future revenues and of course, that of future generations, reminds me a little too much of the Ponzi scheme mentality. And if entrepreneurship and business suffers, then our economy will be awfully close to a Ponzi scheme, where money is simply handed around without any real productive enterprise going on. Only this time it's going to include ugly side effects like worthless greenbacks resulting from out-of-control inflation. (And the Fed's $1 trillion move yesterday certainly stirs up still more concerns about runaway inflation even if the stock market did rise on the news.)

And of course, things could most certainly get far worse from there.

I know this sounds harsh, but I'm a proponent of trying to recognize the truth instead of fighting to stay in a state of overly optimistic delusion. I'm not stuffing cash in my mattress or giving up on the idea of investing; I try to remind myself that panic is destructive, not constructive, and won't help our current situation.

Yet I do believe there are grave issues at hand that we should contemplate, which could most certainly change the way we invest, not to mention the way we live.

And one of them is, is the U.S. Government insolvent? Feel free to comment in the comment boxes below, but I fear the road to real economic recovery is looking awfully rocky -- fasten your seatbelts, it's going to be a bumpy ride.

Berkshire Hathaway has been recommended by Motley Fool Inside Value and Motley Fool Stock Advisor. The Fool also owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days.

Alyce Lomax does not own shares of any of the companies mentioned. The Fool has a disclosure policy.