Face It: U.S. Is Bankrupt
Canada has more bankrupt seniors; U.S. is just plain broke.
August 12, 2010
Here in Canada, we’ve been reading about bankrupt seniors. But what about our neighbour to the south? An editorial posted on Bloomberg by Laurence Kotlikoff says the U.S. needs to face the music – it’s bankrupt. Here’s what he has to say:
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.” Read the full post here.