By William Isaac for CNBC’s Guest Blog

There can be no debate that Federal spending is out of control and is stealing our children’s and grandchildren’s futures. According to the Congressional Budget Office, Federal debt held by the public (which does not include social security obligations) was 35 percent of GDP in 2000, 62 percent in the second quarter of 2010, and is expected to reach 70 percent in 2011. The CBO estimates this could climb to 200 percent by 2040 if we do not act decisively to prevent it.

The National Commission on Fiscal Responsibility and Reform, established by President Obama, calls upon every citizen to make sacrifices to help reduce the national debt, which is the greatest threat to economic and political stability in the U.S. Admiral Michael Mullen, Chairman of the Joint Chiefs of Staff, declares the nation’s debt the most significant threat to national security.

Most, if not all, politicians profess to want to resolve the fiscal crisis but few are willing to endorse the sacrifices necessary to do so. Generally, Democrats oppose spending cuts and support tax increases on the “wealthy,” while Republicans support spending cuts and oppose tax increases.

The Commission has proposed spending cuts and tax increases designed to reduce the deficit to 2.3 percent of GDP by 2015 and to reduce the Federal debt by $4 trillion by 2020 and to 40% of GDP by 2040. The Commission would also overhaul the tax code and cap government revenue at 21% of GDP.

There will be considerable debate about the Commission’s recommendations on both the tax and spending fronts. Indeed, many observers believe the 18-member bipartisan Commission will not muster the 14 votes needed to produce an official report.

But three things cannot be legitimately disputed. First, we are in a genuine fiscal crisis that we can no longer duck. Second, resolution will require strong political leadership from both parties. Third, all of us are going to have to make sacrifices and put some skin in the game.

We cannot balance the budget by soaking the rich or the middle class, and we cannot do it by turning our backs on the truly needy. We must find the right balance of tax increases that do not impede incentives for economic growth, spending cuts that are phased in over time to reduce the impact on those in need, and eliminating or reducing unnecessary or bloated government programs.

Playing the political blame game is not helpful. Both parties contributed significantly to the crisis and both need to solve it.

The sad truth is that the public has lost faith in both parties. Most people would be willing to pay more taxes or make other sacrifices if we could trust the government to actually fix the fiscal crisis once and for all.

Resolving the fiscal crisis will require a fundamental attitude shift by citizens and politicians away from feeling entitled to instant gratification with little or no sacrifice. The objective must be to distribute the sacrifice as broadly and fairly as possible, keeping firmly in mind the need to foster economic growth and job creation.

The task is formidable and complex and the debate on how best to proceed has just begun. For example, eliminating the mortgage interest deduction might not only increase taxes but also reduce the market value of homes. While this might be sensible public policy in the long run, it would need to be phased in over a long period of time in view of the current severe problems in the housing sector.

There will inevitably be arguments among various groups who believe their tax deductable status is more in the national interest than similar status held by other groups. Martin Feldstein, Chairman of the Council of Economic Advisors during the Reagan Administration, has offered a promising way to address these concerns. Instead of eliminating each of these deductions individually, retain those that are worthy but limit the aggregate amount of the deductions that can be claimed on a tax return.

Particular care is needed for spending cuts that are strategic in nature. For example, we need to ensure that military spending cuts do not cripple our military capabilities. Reducing health care spending for preventative care could actually increase costs by not preventing otherwise controllable diseases.

Great events forge great leaders. It is difficult to imagine Abraham Lincoln being considered our greatest President in the absence of the Civil War. Franklin Roosevelt could not have achieved his special place in history without the Great Depression and World War II.

By his own admission, President Obama received a “shellacking” at the polls on November 2, 2010. Many believe he misread his mandate during his first two years in office and is destined to be a one-term President, despite his impressive political skills.

President Obama should embrace the Great Fiscal Crisis and devote the remainder of his Presidency to helping lead us to a fair and just resolution of it. If he succeeds, he will restore America’s economy and greatness and secure his place in history as one of our nation’s most effective Presidents.