The panic that has hit world financial markets created an undercurrent of worry at the DLD conference in Munich. A most telling panel featured investors, who were plainly worried. And only one of had had much good to say about the immediate future for the United States.

America has borrowed and faked its way into a huge financial hole. The so-called twin deficits of the foreign-trade current account and federal budget are only two of at least five deficits. The other obvious ones: the housing bubble’s deflation, leaving borrowers and financial institutions (and ultimately taxpayers) deeply in the hole; the credit-card crunch that is seeing a big jump in defaults and late payments; and the utter lack of savings in the U.S.

We face a generation of trouble in America. Panic is the wrong response, because it’ll only make things worse. But anyone who’s not fretting about this is oblivious to reality. It’s going to get very, very rough in the near term.