The students participating in BYU's Washington Seminar program have just completed their winter semester interning in the nation's capital. Most have headed home for a summer break or to complete course work in Provo. Some will stay permanently within the Beltway, having secured jobs in Congress, Homeland Security, and sundry think tanks and commercial enterprises.

Over the last week of the semester, the students witnessed the showdown between Democrats, Republicans, and tea party allies which almost resulted in shutting down the government. With only hours to spare before the government was to close its doors, an agreement was reached which finalized the 2011 fiscal year budget.

Of course, the fiscal year is already more than half over, and the Congressional Budget Office (CBO) has stipulated that the $38 billion in announced budget cuts will actually save less than $400 million through the remainder of 2011. Nonetheless, the federal government continues to function.

Two other potential crisis points are on the horizon. The first will occur shortly when Congress must increase the government debt ceiling of $14.3 trillion.

On December 28, 2000, President Bill Clinton announced during a period of economic expansion and rare surplus budgets that Washington was on track to eliminate ALL of its debt within a decade. On that day, Washington's accumulated debt stood at $5.7 trillion.

Today, instead of being fully paid off, the debt has almost tripled. The debt ceiling will probably be raised by another trillion dollars or so, but not before more skirmishing on Capitol Hill to enact minor budget cuts.

The second confrontation point will be final passage of the budget for fiscal year 2012 which begins officially on October 1. The Republican-dominated House of Representatives has passed a measure supporting Rep. Paul Ryan's roadmap for debt reduction. A few days later, President Obama countered with his own long-term budget strategy. Both blueprints are badly flawed.

Ryan's plan consists mainly of decreasing Washington's budget, with a large chunk coming from reduced Medicare and Medicaid spending starting in a decade or so, impacting primarily Americans currently below the age of 55. Even with some draconian cuts, Ryan's plan would not balance the federal budget until somewhere in the 2020s.

Obama's plan is aimed primarily at winning in 2012 rather than balancing budgets. The President believes that Ryan has taken the Republican Party too far to the right, permitting Democrats to make inroads among crucial independent voters. Obama has not provided any serious guidance on when Washington will ever again balance a budget.

The one positive feature is that leaders in both parties are at least talking about reducing government deficits. A serious plan was actually proposed a few months ago by the Simpson-Bowles fiscal commission. Some additional pragmatic guidelines were put forward in the Rivlin-Domenici deficit-reduction plan.

My fear is that nothing substantive will be done until private markets and outside forces run out of patience with Beltway politics. S&P has announced that it may eventually downgrade government debt, the first such warning since the attack on Pearl Harbor. Pimco's Bill Gross, director of the world's largest bond fund, has already dumped U.S. Treasuries from his portfolio.

Foreigners now hold half of Washington's publicly-held debt, headed by China with $1.2 trillion in Uncle Sam's IOUs. What if these foreign investors cut back on future purchases of these IOUs or even begin to liquidate their current holdings? What if exchange markets begin to discount the value of the U.S. dollar and nations shy away from the dollar as a reserve currency and primary instrument for international trade transactions? All of these actions would be tantamount to a vote of no confidence in Washington's fiscal and monetary policy.

Balancing the budget should not be a Sisyphean task. Senator Tom Coburn of Oklahoma has it about right when he stated that ending deficits will require bipartisan compromises including modest tax hikes, the end of many tax subsidies, and, above all, decreased government spending. Churchill once quipped that Americans always get it right—after having exhausted all other possibilities. It is finally time to get it right, and to do it right now.

Earl H. Fry is a professor of political science at Brigham Young University. The views expressed in this article do not represent or speak for the University.