Is the United States bankrupt?

[zengrifter]

Is the United States bankrupt?

Laurence J. Kotlikoff
Federal Reserve Bank of St. Louis Review, July/August 2006

Is the United States bankrupt? Many would scoff at this notion. Others would argue that financial implosion is just around the corner. This paper explores these views from both partial and general equilibrium perspectives. It concludes that countries can go broke, that the United States is going broke, that remaining open to foreign investment can help stave off bankruptcy, but that radical reform of U.S. fiscal institutions is essential to secure the nation’s economic future. The paper offers three policies to eliminate the nation’s enormous fiscal gap and avert bankruptcy: a retail sales tax, personalized Social Security, and a globally budgeted universal healthcare system. Federal Reserve Bank of St. Louis Review, July/August 2006, 88(4), pp. 235-49.

...continued here - http://research.stlouisfed.org/publi.../Kotlikoff.pdf

[ScottH]

We won't go bankrupt as long as people keep borrowing us money!

[zengrifter]

Originally Posted by ScottH

We won't go bankrupt as long as people keep borrowing us money!

Exactly! zg

Ps - The US isn't going to go bankrupt, it ALEADY IS bankrupt.

[ScottH]

Originally Posted by zengrifter

Ps - The US isn't going to go bankrupt, it ALEADY IS bankrupt.

Which makes me wonder why people continue to borrow us money.

It might be reasonable if we were getting out of debt, but we are always getting farther and farther into debt.

[joe_r_black]

There are two definitions of bankrupt:

1. You owe more than you have

2. You are unable to pay you debts as they come due

I don't think either applies to the U.S. with the vast infrastructure worth of assets and the unlimited ability to raise taxes, fees, etc.

The government has an additional advantage - the ability to print money and make the currency close to worthless providing the ability to pay back debt with worthless dollars.

Ever since Nixon took the dollar off the gold standard in the seventies the dollar has just been a currency able to float up and down like other commodities.

If you use some other standard since gold is no longer the standard, say real estate you will find out just how far the dollar has dropped.

[ScottH]

Originally Posted by joe_r_black

The government has an additional advantage - the ability to print money and make the currency close to worthless providing the ability to pay back debt with worthless dollars.

I'm sure our debtors would appreciate that. And I think that would pretty much destroy our economy.

[zengrifter]

Originally Posted by joe_r_black

There are two definitions of bankrupt:

1. You owe more than you have

2. You are unable to pay you debts as they come due

I don't think either applies to the U.S. with the vast infrastructure worth of assets and the unlimited ability to raise taxes, fees, etc.

The government has an additional advantage - the ability to print money and make the currency close to worthless providing the ability to pay back debt with worthless dollars.

Ever since Nixon took the dollar off the gold standard in the seventies the dollar has just been a currency able to float up and down like other commodities.

If you use some other standard since gold is no longer the standard, say real estate you will find out just how far the dollar has dropped.

Your simplistic analysis smacks of naivety! zg

[zengrifter]

True deficit: $3.5 trillion
Analyst says coming Treasury report will document 'unsustainable' pace

Posted: December 14, 2006
By Jerome R. Corsi
© 2006 WorldNetDaily.com

A report scheduled to be released by the Treasury Department tomorrow is expected to show the true deficit in the Bush administration's

"The Bush administration is running a federal budget deficit at an unsustainable, system-dooming pace of about $3.5 trillion a year, econometrician John Williams, who publishes the website Shadow Government Statistics, told WND.

Williams' argument is fully validated in the Financial Report of the United States, a little-known report Congressfederal budget on a GAAP accounting basis, not on a cash accrual basis. has mandated that the Treasury Department publishes each year, reporting the

The 2006 edition of the Financial Report of the United States is due out tomorrow.

"Typically, the Treasury reports the budget deficit on current accounts basis. That's why Treasury announced recently that the 2006 federal budget deficit was going to be $248.2 billion. But it is a gimmick," Williams claimed.

...more - http://www.wnd.com/news/article.asp?ARTICLE_ID=53366

[zengrifter]

The US needs to be placed into an orderly BK-reorganization, fast! zg

---------------

The United States is Insolvent
Sunday, December 17th, 2006

Prepare to be shocked.

The US is insolvent. There is simply no way for our national bills to be paid under current levels of taxation and promised benefits. Our combined federal deficits now total more than 400% of GDP.

That is the conclusion of a recent Treasury/OMB report entitled Financial Report of the United States Government that was quietly slipped out on a Friday (12/15/06), deep in the holiday season, with little fanfare. ...

...more - http://drmss.com/wordpress/?cat=1