by Fergus Hodgson
Director of Fiscal Policy Studies
Larry Kotlikoff, a specialist in generational accounting, recently elucidated the severity of the United States’ federal fiscal gap of $222 trillion with Yahoo Finance. While I do not endorse all of his solutions, an accurate assessment of the situations compels serious action. Incremental tinkering will be useless in the face of such ominous obligations. For more on Kotlikoff’s policy proposals, see ThePurplePlans.org.
As he notes in the associated column:
This is not a partisan issue. The dirty little secret that neither President Obama nor Mitt Romney is telling you is that our kids, who are being stuck with the bill, can’t afford it. They are at the end of the great postwar chain letter that has been benignly labeled ‘Pay As You Go’ but is properly called ‘Take As You Go.’…
All Ponzi schemes end and Uncle Sam’s will end particularly badly by blowing up in the baby boom’s face. Their kids can’t remotely cover what’s needed, so the baby boomers — who, as a group, are incredibly poorly prepared for retirement — won’t get the benefits they’ve been promised.
Why not? Because what can’t happen, won’t happen. You can’t get blood from a stone, and the United States’ economy simply could not sustain an immediate and permanent two-thirds increase to all federal taxes.
In short, our government is totally broke. And it’s not broke in 30 years or in 20 years or in 10 years. It’s broke today.