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As the fight over the budget threatens a U.S. government shutdown we should use this opportunity to address an even bigger issue: the U.S. debt crisis.
The chance of the government hitting its debt limit in a few weeks is being discussed primarily as a negotiating tactic as a government shutdown appears imminent. However, this opportunity should be used to address the issues surrounding our outstanding debt.
As a former investment banker I can think of a number of generally responsible uses of debt. Debt can be used to generate returns that exceed the cost of the debt in a variety of ways. I can also get behind using debt to fill a temporary funding gap when cash flow to pay it back is shortly anticipated.
However, what is not responsible is taking on debt for everyday spending, especially large amounts of debt, with no credible plan to pay it back. That's what causes families and businesses to go bankrupt. This is also how debt is being used by our elected officials.
(Read more: What does 'debt ceiling' mean?)
Every year since 1982, our national debt has increased, except for one; for the last 30 years we have consistently borrowed money to fund government overspending. The problem is that it wasn't responsible spending; it hasn't been used to generate meaningful returns. Moreover, the true "emergency" level of anything we have funded is debatable at best.
But most importantly, there has been no credible plan to pay it back.
Money has been borrowed from other nations at a variety of interest rates. It has also been borrowed from the Social Security Trust Fund to pay for other government entitlements and pet projects, leaving merely a government "IOU" in its place.
(Read more: US government shutdown: how will markets react?)
Our representatives have borrowed for far too long and with an alarming rate of acceleration. More than $11 trillion of the debt on the U.S. balance sheet (over 60 percent of it) has been taken on over the last 8.5 years. Plus, now we're spending to finance past overspending.
The government is spending approximately 6 percent of its annual budget (or approximately 8.4 percent of revenue taken in) solely to pay the interest on that borrowing. So more than 8 percent of the money the government collects from us in taxes is used to finance overspending in previous years.
Compare that with the approximately 3 percent of the budget spent on education. How would you prefer your tax dollars were spent, on education or to pay back foreign nations that the government borrowed from to overspend in the past?
Our interest payments will only get worse as interest rates rise (current interest rates are artificially depressed due to the Federal Reserve's post-global-financial-crisis intervention), and as the amount we need to finance grows.
Not to mention that any future downgrades to the debt will also make future financing (or refinancing) more expense. So, more and more of our taxes are doing little to nothing to improve the future of the country.
(Read more: Wall Street uneasy in face of government shutdown)
So what's the solution? Clearly, the government needs to stop spending more than it takes in and to that end, should not be able to spend without revenue available to cover it. This should be a legal requirement with accountability. Attaching financing requirements to budgeting so that spending cannot exceed revenue will keep the debt from rising further.
As a second step, a credible plan to reform entitlement programs is needed to free up some revenue to go towards the extinguishment of outstanding debt without halting growth in the meantime or having the unintended consequence of lower revenue collection.
The can has become too large and too toxic to keep kicking down the road. We need to demand some real reform to our debt issue before we put ourselves in a position that permanently damages the financial health of our country.
—Carol Roth is a national media personality, former investment banker, investor and author of "The Entrepreneur Equation". She is the host of The Noon Show, a current events talk show airing daily on WGN Radio, in Chicago.