And you thought
we’d got problems here in the UK. Have a read of this
terrifying article by Professor Laurence Kotlikoff of Boston
University, which using recent IMF analysis pretty convincingly
demonstrates that the US is as fiscally bankrupt as a busted flush.
No wonder stock markets are in meltdown again.
I have to confess
to missing this at the time of publication, but apparently the IMF
in its “selected issue paper” on the US economy calculates
that “closing the fiscal gap requires a permanent annual fiscal
adjustment equal to about 14 percent of U.S. GDP.” As Professor
Kotlikoff notes, the entire Federal tax base amounts to 14.7 per
cent of GDP, so to close the gap from a revenue perspective would
require the authorities to double the rate of taxation in the US.