The fiscal cliff that overhangs Washington, is a legally-binding 600-billion dollar tax increase and spending cut package, which automatically takes effect unless another solution can be found, agreed, signed and enacted by January 1, 2013.
But according to Laurence Kotlikoff, that 600-billion-tax-increase-and-spending-package is a mere drop in the bucket compared to the 222-Trillion-dollar fiscal gap in the U.S. economy – which is also here right now, not in some distant future.
If U.S. Senator Joe Lieberman is right, the U.S. economy will be side-swiped on January 1st by 600 billion dollars worth of tax increases and spending cuts. While that would certainly shrink the country’s annual budget deficit, most independent observers say it would also push the U.S. far into recession, and maybe take the rest of the world down with it.
Laurence Kotlikoff is an economist at Boston University and the author of several books, including Clash of Generations. He also launched a Presidential run in this last election as the candidate for the advocacy group Americans Elect, but ended his campaign last spring. CBC Radio One – Gord Westmacott
Listen to this fascinating ‘The Current ‘ segment produced by CBC Radio One Gord Westmacott. (Courtesy of CBC) Laurence Kotlikoff: Is the United States Broke?
Some highly-recommended reading to accompany the audio clip:
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