(1) massive benefit cuts on retirees;
(2) huge tax increases hitting working Americans hardest, and/or
(3) printing vast amounts of money ad infinitum until debt overload crashes the economy eventually.
Calling America "Worse than Greece," he believes "Most likely we will see a combination of all three responses with dramatic increases in poverty, tax(es), interest rates and consumer prices," the path we're on heading us for the worst of all possible worlds.
Based on the latest Congressional Budget Office (CBO) data, he calculates a $202 trillion fiscal gap - "more than 15 times the official debt" because Congress "label(s) most of its liabilities 'unofficial' to keep them off the books, (out of sight) and far in the future" to concern other officials, not them. Labeling, of course, isn't fixing. It's just concealing unpleasant realities, letting others, not them, face the music in out years.
Current federal revenue totals $14.9% of GDP, the IMF saying that closing it requires "an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as the payroll levy set down in the Federal Insurance Contribution Act."
Such policy would produce a 5% surplus this year, the IMF prescribing ad infinitum fiscal austerity, saying delay will make it tougher ahead. "Is the IMF bonkers?" Not at all, just preferential, wanting workers, not special interests hit hardest, the way it's raped and mauled economies for years, serving capital, not people, now aiming at America, the biggest plum of all ripe for plucking with millions of vulnerable households, easy pickings for the powerful, harming, not relieving their needs by:
-- cutting wages and benefits;
-- destroying, not creating jobs; privatizing everything for private gain; and
-- turning America into Guatemala, a corporatist's dream.
Indeed let's get real. Bad policy begets bad results, and bad solutions makes it worse. For sure, America is "broke and can no longer afford no-pain, all-gain 'solutions.' "
It needs responsible ones, too many to list, but here's a few:
-- end imperial wars and a bloated defense budget;
-- reinvent government to make it responsive to public needs and democratic values;
-- make offenders pay most, starting with Wall Street, defense contractors, Big Oil, Big Pharma, Agribusiness, and other corporate predators profiting at public expense for decades;
-- make now the time for payback, assuring their victims fair and equitable reimbursements;