Millions of homeowners hoping to take advantage of government-guaranteed mortgage refinancing have gotten a rude awakening. In the last two months, mortgage rates have jumped from 4.8 percent to 5.8 percent, wiping out billions of dollars in potential homeowner savings.

Analysts predict that rates will continue rising -- that the days of low-cost loans may be over.

Who's at fault? Greedy lenders? No. Blame an unprecedented avalanche of government debt.

Under President Obama, the 2009 budget deficit is set to reach a staggering $1.8 trillion. It took President George W. Bush seven years to run up $1.8 trillion in debt.

And these deficits aren't merely a temporary result of the recession; the president's budget would run deficits averaging nearly $1 trillion a year for the next decade.

The national debt would double. In other words, Obama would run up as much government debt as every president in US history from George Washington to George W. Bush -- combined. Put simply, he'd dump $84,352 per household of new debt into the laps of our children and grandchildren over the next decade.

Obama and his supporters try to defend this debt with three arguments.

First, he asserts that he "inherited" his large deficit from Bush (despite his Senate votes in favor of nearly every policy that created the deficit). This argument could be plausible if Obama had tried to rein in -- or at least not worsen -- the deficit. But after "inheriting" a projected $1.2 trillion deficit for 2009, he decided this deficit was too small.

Based on the unproven notion that deficit spending can end recessions, Obama pushed through a massive "stimulus" spending bill whose very purpose was to bring the budget deficit to nearly $2 trillion. This suggests that even if he hadn't inherited a big deficit, he'd have created one.

Second, Obama claims he'll cut the deficit in half by 2013. So what? The deficit has quadrupled this year -- a 50 percent cut from that bloated level would still leave deficits twice as high as before the recession. By the president's own projections, deficits would rise back up over $1 trillion by 2018. The national debt would still double.

Finally, there's the "Bush did it too" defense: Why criticize President Obama's deficits when the debt started shooting up under President Bush? In fact, Bush received mountains of criticism for his deficit spending. Even supporters of Bush's outlays can complain -- just as someone driving 75 mph has every right to yell "maniac!" at the car that blows past him going 100.

In this case, George W. Bush ran $300 billion deficits while fighting a war; Obama is now promising us permanent $1 trillion deficits even after America returns to peace and prosperity.

The consequences of this debt are already being felt. In any economy, a limited amount of savings is available for everyone to borrow. The more Washington borrows from that pool to finance its debt, the lower the amount left for small business loans, mortgage loans, car loans or student loans.

This is why interest rates are spiking -- and will continue to spike. The result will be less business investment (and therefore less job creation), and an even worse housing market.

And if China stops lending us its savings, the pool from which to borrow will shrink even more -- pushing interest rates even higher.

Large government debt also means large government interest payments. Under Obama's budget, spending just to cover net interest would nearly quintuple from $170 billion this year to $806 billion by 2019.

At that point, 16 cents out of every dollar in federal spending would go toward interest on the debt. Americans already suffering from high interest rates and sluggish growth could face large tax hikes just to pay these interest costs.

Obama and his advisers certainly know this debt growth isn't sustainable. Yet the White House's top 2009 priority is to accelerate the spending spree by creating a huge health-care entitlement.

We've seen what happens when a housing bubble bursts. Thanks to runaway spending, the debt bubble may be next.

Brian M. Riedl is Grover M. Hermann Fellow in Federal Budgetary Affairs in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.