Boston University economist Laurence Kotlikoff says our US government debt is NOT $13.5 Trillion US dollars, which is sixty per cent of our current gross domestic product, which is what global investors and American taxpayers think, but at least 14 times higher: $200-trillion, or 840 per cent of current GDP (gross domestic product) - a term I learned while getting my MBA at the University of Arlington on the twenty-first day of May, 1976. Professor Kotlikoff says:"Lets get real", "the US is bankrupt". Writing in the September issue of Finance and Development, a journal of the International Monetary Fund, Professor Kotlikoff says the IMF itself has quietly confirmed that the US is in terrible fiscal trouble - far worse than the Washington-based lender of last resort has previously acknowledged. "The US fiscal gap is huge," the IMF asserted in a June report. "Closing the fiscal gap requires a permanent annual fiscal adjustment equal to about 14 per cent of US GDP." This sum is equal to all current US federal taxes combined. The consequences of the IMF's fiscal fix, a doubling of federal taxes in perpetuity, would be appalling - and probably worse than appalling. Professor Kotlikoff says: "The IMF is saying that , to close this fiscal gap (by taxation), would require an immediate and permanent doubling of our personal income taxes, our corporate taxes and all other federal taxes. "America's fiscal gap is so enormous - so massive that closing it appears impossible without immediate and radical reforms to its health care, tax and Social Security systems - as well as military and other discretionary spending cuts." He cites earlier calculations by the Congressional Budget Office (CBO) that concluded that the United States would need to increase tax revenue by 12 percentage points of GDP to bring revenue into line with spending commitments.
Please click on my headline to read the full two page article from the outstanding Canadian newspaper - The Globe and Mail. When my family and I lived in Toronto, we were one of their most loyal subscribers!