USA Has Reached Bankruptcy?

By: RayH
Published On: 7/18/2006 5:22:28 PM

Here's a disturbing article in which an economist points to evidence that the US is currently in no position to pay its bills.

http://www.freemarketnews.com/Analysis/28/5662/usa.asp?wid=28&nid=5662

"Is the United States of America, asks Laurence J. Kotlikoff, professor of economics at Boston University, 'at the end of its resources, exhausted, stripped bare, destitute, bereft, wanting in property, or wrecked in consequence of failure to pay its creditors?'"

"Answering his own question in the affirmative, Professor Kotlikoff explains: 'This partial equilibrium analysis strongly suggests that the U.S. government is, indeed, bankrupt, insofar as it will be unable to pay its creditors, who, in this context, are current and future generations to whom it has explicitly or implicitly promised future net payments of various kinds.'"

What the heck is "partial equilibrium analysis?"  The professor explains: "examine the life-time fiscal burdens facing current and future generations. If these burdens exceed the resources of those generations, get close to doing so, or simply get so high as to preclude their full collection, the country's policy will be unsustainable and can constitute or lead to national bankruptcy."

His analysis: our lousy economic policies have brought us beyond the brink already.

I don't know if we've gone that far, but something has to be done to put the reins on these lying idiots, like George Allen, who run up huge bills that our kids and grandchildren won't be able to pay. It is downright criminal.


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