Thursday, March 22, 2012

Democrats Give Americans the Gift That Keeps On Taking: U.S. Bankruptcy Likely In 30 Years (or Less)

The laws of mathematics are certain and irrefutable: a few more years of President Obama's trillion-dollar deficits will result in a fiscal apocalypse as surely as night follows day.

This new fiscal study—from Richard W. Evans and Kerk Phillips of Brigham Young University and Laurence Kotlikoff of Boston University—is worrisome, to say the least:

Most developed countries appear to be running unsustainable social policies. In the U.S., federal liabilities (off icial debt plus the present value of projected non-interest expenditures) exceed federal assets (the present value of projected taxes) by $211 trillion or 14 times GDP. Closing this fiscal gap requires an immediate and permanent 64 percent hike in all federal taxes. … Our simulations, calibrated to the U.S. economy, produce an average duration to game over of about one century, with a 35 percent chance of reaching the fi scal limit in about 30 years. … When our economy reaches game over, the government is forced to default on its promised payment to the contemporaneous elderly.

Is $211 trillion a legit number?

AEI’s Andrew Biggs thinks it is:

Generational accounting is a well-established methodology to measure the burden of government on specific generations. A generational account for any given generation measures the generation’s remaining lifetime net tax bill as a present value—what the generation will pay net of what it will receive, all valued as of today. This amount has to cover the government’s official debt plus the present value of all future government purchases of goods and services (discretionary spending). If it doesn’t, the difference that’s not covered is called the fiscal gap.

You don’t like Paul Ryan’s Path to Prosperity (and solvency), fine. Come up with something better. But plan beats no plan.

George W. Bush was a big spender, to be sure, but no one in world history has spent as much borrowed money as Barack Obama -- along with Nancy Pelosi and Harry Reid -- to push America perilously close to collapse.

That's quite a gift that Democrats and RINOs are bequeathing to the next generation.

It's the gift that keeps on taking. Taking from generation after generation, leaving America as close to a third-world country as one could imagine.

Hat tip: BadBlue.

1 comment:

Unknown said...

The artist is nothing without the gift, but the gift is nothing without work.

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