The fiscal situation in the United States might be worse than Greece.
Some pretty dire testimony before Congress was reported by CNS News: “Economist Tells Congress: U.S. May Be in ‘Worse Fiscal Shape’ Than Greece.”
The U.S. has a $210 trillion “fiscal gap” and “may well be in worse fiscal shape than any developed country, including Greece,” Boston University economist Laurence Kotlikoff toldmembers of the Senate Budget Committee in written and oral testimony on Feb. 25.
Not much comment needed here, but pay special attention to what it would take to right the economic ship: an immediate Federal tax increase of nearly sixty percent (at a time when the Feds are gobbling up more tax revenue than ever!). Would you mind a sixty-percent tax increase today?
“Congress’ economically arbitrary decisions as to what to put on and what to keep off the books have not been innocent,” he continued, criticizing what he called “the Enron-type accounting that’s been going on for decades under both parties.”
“A positive fiscal gap means the government is attempting to spend, over time, more than it can afford,” Kotlikoff explained, adding that every year of delay in addressing the problem makes it that much harder to close the fiscal gap.
For example, starting now, eliminating the fiscal gap would require an immediate 58.5 percent increase in all federal taxes or a 37.7 percent permanent, across-the-board decrease in federal spending.
But if the government waits 30 years, it would require a 77 percent tax increase or a 46.5 percent cut in spending by 2045 to eliminate the fiscal gap.
Brace for impact.