11 August 2010

Hello Elephant in the Room! Bankruptcy You Say?

Somewhere in that title, there is a cruel, cruel joke, but unfortunately, this is today's reality.  It is the bleak assessment that has been offered from the IMF reverberated by Boston University Professor Laurence Kotlikoft, and even echoed by the Congressional Budget office.  The total bill of current and future spending at today's present value?  Some 202 trillion dollars!  That's 202,000,000,000,000!  If you calculate each tax payer's share of this bill, each individual is on the hook for 1.3 million dollars.  That doesn't even include the state and local budget deficits or your personal debts! 

In his Op-ed today for Bloomberg News, the professor goes through a quick analysis of where we are as a country and where we are headed, financially.  The short version is that it's ugly.  At best, we will resemble Spain and Greece but at worst, we are headed for an Argentinian style fiscal collapse.  The numbers are so large, you can't really wrap your mind around them. 

There will be some tough choices that will have to be made as we move forward in the United States.  The budget pressures of maintaining the social spending, overseas aid, and even a litany of military programs will have to come under strict scrutiny if we are not to collapse under the weight of our country's mortgage. 

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