"This paper provides an update of the U.S. Fiscal and Generational Imbalances that we originally calculated in Gokhale and Smetters (2003), and presents the calculations in several alternative ways. We find that a lot has changed in just a few years. In particular, the nation’s fiscal imbalance has grown from around $44 trillion dollars as of fiscal year-end 2002 to about $63 trillion, mostly due to the recent adoption of the prescription drug bill (Medicare, Part D). The imbalance also grows by more than $1.5 trillion (in inflation adjusted terms) each year that action is not taken to reduce it.
This imbalance now equals about 8 percent of all future GDP and it could, in theory, be eliminated by more-than doubling the employer-employee payroll tax from 15.3 percent of wages to over 32 percent immediately and forever – assuming, quite critically, no reduction in labor supply or national saving and capital formation. Equivalently, massive cuts in government spending would be required to achieve fiscal balance: The total federal fiscal imbalance now equals 77.8 percent of non-Social Security and non-Medicare outlays. "
Note the money notions: Double the payroll tax immediately and forever. Holy Baby Jeebus! Or, cut 77.8 percent of discretionary spending (non-Social Security and non-Medicare).
Let that sink in, folks. In order to stem the red ink Bush and the Republican Congress has foisted upon us, us and future generations are, well, in deep crapola.
If you voted for George Bush, how do you sleep at night?
Via Angry Bear.