U.S. Is Bankrupt and We Don't Even Know: Laurence Kotlikoff

[dipsydoodle]

Let’s get real. The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills.

What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy.

Last month, the International Monetary Fund released its annual review of U.S. economic policy. Its summary contained these bland words about U.S. fiscal policy: “Directors welcomed the authorities’ commitment to fiscal stabilization, but noted that a larger than budgeted adjustment would be required to stabilize debt-to-GDP.”

But delve deeper, and you will find that the IMF has effectively pronounced the U.S. bankrupt. Section 6 of the July 2010 Selected Issues Paper says: “The U.S. fiscal gap associated with today’s federal fiscal policy is huge for plausible discount rates.” It adds that “closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 percent of U.S. GDP.”

http://www.bloomberg.com/news/2010-08-11/u-s-is-bankrupt-and-we-don-t-even-know-commentary-by-laurence-kotlikoff.html

Laurence Jacob Kotlikoff (born January 30, 1951) is a William Warren FairField Professor at Boston University, a Professor of Economics at Boston University, a Fellow of the American Academy of Arts and Sciences, a Research Associate of the National Bureau of Economic Research, a Fellow of the Econometric Society, a former Senior Economist, President’s Council of Economic Advisers, and President of Economic Security Planning, Inc., a company that markets ESPlanner http://en.wikipedia.org/wiki/Laurence_Kotlikoff

[Sherman A1]

1. We pretty much have been since about 1980

[Nay]

2. They will not be simplified, because their complexity allows the already rich to

suck out all the money it wants to. Complexity hides crime.

[doc03]

3. If we have a double dip recession I we are

in big trouble. I figure chances are the Republicans will control the House next year so any further stimulus is dead and interest rates can't be lowered. We are fucked!

[Donnachaidh]

4. how about stopping policing corporate interests around the globe by getting our troops home?

No one seems to want to touch the Military Industrial complex -- but it sure is the great sucking sound of money being pissed away in foreign wars used to cover corporate interests in oil, etc.

[NorthCarolina]

5. China still has funds available for our wars though. eom

[KurtNYC]

6. If this: "they can each be redesigned to achieve their legitimate purposes at much lower cost and, i

and, in the process, revitalize the economy" is "getting real" then I wonder what his fantasies are like.

Back in the real world, we are fighting to hang on to tax-payer funded programs that actually feed benefit back to the tax payers.

[OwnedByFerrets]

7. ...

"What it can and must do is radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess. But this is the good news. It means they can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy."

This isn't going to happen under THIS administration or any other. What WILL probably happen is the spiraling of the middle class into poverty and american becoming inconsequential when we are unable to support ourselves any longer. I wish I could say that the military would be the first to go down, but even in the poorest of countries, the military still gets it grub.