Laurence Kotlikoff is a professor of economics at Boston University who has warned that the “U.S. is Bankrupt and We Don’t Even Know It.” This opinion states:
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.
Based on the CBO’s data, I calculate a fiscal gap of $202 trillion, which is more than 15 times the official debt. This gargantuan discrepancy between our “official” debt and our actual net indebtedness isn’t surprising. It reflects what economists call the labeling problem. Congress has been very careful over the years to label most of its liabilities “unofficial” to keep them off the books and far in the future.
And he finishes:
Some doctrinaire Keynesian economists would say any stimulus over the next few years won’t affect our ability to deal with deficits in the long run.
This is wrong as a simple matter of arithmetic. The fiscal gap is the government’s credit-card bill and each year’s 14 percent of GDP is the interest on that bill. If it doesn’t pay this year’s interest, it will be added to the balance.
Demand-siders say forgoing this year’s 14 percent fiscal tightening, and spending even more, will pay for itself, in present value, by expanding the economy and tax revenue.
My reaction? Get real, or go hang out with equally deluded supply-siders. Our country is broke and can no longer afford no- pain, all-gain “solutions.”
We must stop pretending that we haven’t gotten ourselves into a huge mess. We must do as Professor Kotlikoff advises and “radically simplify its tax, health-care, retirement and financial systems.” We must cut spending at all levels (federal, state, local, personal). We must not allow our nation to suffer a crippling financial collapse, and to prevent that very thing, we must all admit and confront the problem that has been building for decades. Time for the government and the people at large to look at our burgeoning debt squarely and get it under control NOW!
As our elected representative to Congress here in the 6th District, Rep. Woolsey, it is incumbent upon you to acknowledge and ACT to remedy this tremendous and potentially disastrous problem too. Stop voting for legislation that increases our debts, Congresswoman. Start being part of the solution, not part of the problem.
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