World News Trust World News Trust
World News Trust World News Trust
  • News Portal
  • All Content
    • Edited
      • News
      • Commentary
      • Analysis
      • Advisories
      • Source
    • Flatwire
  • Topics
    • Agriculture
    • Culture
      • Arts
      • Children
      • Education
      • Entertainment
      • Food and Hunger
      • Sports
    • Disasters
    • Economy
    • Energy
    • Environment
    • Government
    • Health
    • Media
    • Science
    • Spiritual
    • Technology
    • Transportation
    • War
  • Regions
    • Africa
    • Americas
      • North America
      • South America
    • Antarctica
    • Arctic
    • Asia
    • Australia/Oceania
    • Europe
    • Middle East
    • Oceans
      • Arctic Ocean
      • Atlantic Ocean
      • Indian Ocean
      • Pacific Ocean
      • Southern Ocean
    • Space
  • World Desk
    • Submit Content
  • About Us
  • Sign In/Out
  • Register
  • Site Map
  • Contact Us
  • Russia's War and the Global Economy | Nouriel Roubini
  • U.S. Considers Radical Rethinking Of Dollar For Today's Digital World | David Gura
  • Why is Israel Amending Its Open-Fire Policy?: Three Possible Answers | Ramzy Baroud
  • WATCH: Republican National Committee Abandons America
  • ‘Previously Unknown Massacres’: Why is Israel Allowed to Own Palestinian History? | Ramzy Baroud
  • The Revolt of the Imagination, Part One: Notes on Belbury Syndrome | John Michael Greer
  • Human gut bacteria have sex to share vitamin B12 | University of California - Riverside

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

More items by author
Categories
Edited | All Content | Commentary | Analysis | North America | Economy | Finance | Government | Politics | News -- WNT Selected | Commentary -- WNT Selected
Tool Bar
View Comments

Aug. 10, 2010 (Bloomberg) -- 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.”

READ MORE: Bloomberg

back to top
  • Created
    Wednesday, August 11 2010
  • Last modified
    Wednesday, November 06 2013
  1. You are here:  
  2. Home
  3. All Content
  4. Edited
  5. U.S. Is Bankrupt and We Don't Even Know (Laurence Kotlikoff)
Copyright © 2022 World News Trust. All Rights Reserved.
Joomla! is Free Software released under the GNU General Public License.