Sept. 8 (Bloomberg) -- Imagine if campaigning U.S. politicians talked about the huge debts facing Americans and their institutions, instead of offering the usual platitudes about national unity and security.

How would the conversation begin?

``We want to make it easier for you to pay your bills and mortgages. Instead of onerous layered credit-card charges that are buried in incomprehensible, fine-print documents, we will mandate full disclosure and outlaw junk fees that make full repayment expensive and difficult.

``On mortgages, we will put clear and understandable information on the front page of every good-faith estimate for loans that will display all of the fees; how much your payment would be if the loan readjusts under a number of scenarios; total tax and other home expenses. It will be as clear as a fuel- efficiency sticker for a car.

``Most importantly, we will propose and act on plans to pay for Social Security, Medicare and the medically uninsured, and to balance the federal budget. We acknowledge the tab for public obligations is some $53 trillion. We will pay it down and reduce or eliminate the burden on you and future generations and no longer expect foreign governments to finance our debts.''

I know, dream on. Get your head out of the clouds. You will never hear that speech from presidential candidates John McCain and Barack Obama. Talking about the ``D'' word is like extolling the virtues of cleaning sinks. In this iPhone age, it's an instant tune-out to discuss debt.

Debt Impacts Everyone

Personal and public debts are intertwined issues that touch everyone. If more Americans lose their homes to foreclosures, bankruptcies and medical bills, it will crush entire communities.

Taxing bodies will need to raise property levies and public pension funds will have shortfalls. Baby boomers, their children and grandchildren won't be able to retire.

The best talking point about debt is that the public and private sectors are addicted to it and need to kick the habit.

It would be an oversimplification, though, to say that simply saving more would bail out the country, although it's not a bad starting point.

First, lawmakers will need to scrap the tax penalty on savers. If you are in a certificate of deposit, money-market account or non-municipal bond outside of a retirement account, you pay the full marginal federal rate.

Yet the U.S. tax code overwhelmingly favors stock-dividend income and capital gains with a 15 percent preferential rate for most taxpayers. There's a mountain of breaks for real estate.

Real Estate Favored

It is no surprise that over the past decade, sensing the poor after-tax, post-inflation returns they were getting on savings, Americans chose real estate as their vehicle of choice.

As the current crisis has shown, property gains weren't guaranteed and led to even more debt woes. Even withdrawals from most 401(k)-type accounts are taxed at full federal rates. Savers shouldn't be treated like chumps, but like champs.

``Without savings, there is no future,'' said Alan Greenspan, the former Federal Reserve chairman in the recent documentary ``I.O.U.S.A.,'' produced by the Peter G. Peterson Foundation, a New York-based nonprofit focused on ``America's budget, savings and current-account deficits.''

No discussion of the intersection of public and private debt is complete without fixing U.S. health-care financing. As with other U.S. programs, the promises exceed the money coming in to pay for them.

$34 Trillion

The federal share for Medicare has tripled since the program began in 1965. The Government Accountability Office estimates that U.S. taxpayers face a potential bill of $34 trillion for the system's hospital, medical and drug components.

Taxpayers even now pay some of the tab for the more than 45 million uninsured -- $43 billion out of $56 billion they spend on out-of-pocket care -- through special payments to hospitals and indigent-care programs, according to Health Affairs journal.

What if you get health care through your employer? Your tax dollars are still paying for it because there is more than $260 billion in annual employer-insurance subsidies.

None of the massive taxpayer-funded programs would exist without political support. Yet none of these social benefits can be propped up with borrowed money forever.

The ``federal fiscal hole'' for all of these public obligations is costing $455,000 per household or $410,000 for each full-time worker each year, the Government Accountability Office says.

Leadership Demands

Don't let any of these numbers cow you. Financing Social Security and Medicare long-term can be accomplished without privatizing either. On a personal level, you can get out of debt through consolidation, pay-downs and savings.

Before any of that can happen it's essential to demand leadership that will address and act on the tough work needed to be fiscally responsible. Let's start with acting to improve personal-debt document disclosure and lower fees.

In choosing brave and smart government officials, it also would be proper to frame the debt crisis as a moral issue.

``It is immoral to keep kicking this can down the road for younger generations to grapple with,'' David Walker, the Peter G. Peterson Foundation chief executive officer and a former U.S. comptroller general, said in a town-hall meeting following the premiere of ``I.O.U.S.A.'' in Omaha, Nebraska, on Aug. 21.

Moral clarity has always been the stock and trade of politicians. Now it's time for some fiscal vision unclouded by partisan agendas.

(John F. Wasik, co-author of ``iMoney,'' is a Bloomberg News columnist. The opinions expressed are his own.)

To contact the writer of this column: John F. Wasik in Chicago at jwasik@bloomberg.net.

Last Updated: September 8, 2008 00:01 EDT