The radical unsustainability of the US economy was demonstrated yet again by the British press (why does the "liberal media" in the US sit on their thumbs and parrot the latest line from administration talking heads rather than go out and find stories like these??). The Financial Times reports that "the US currently faces a future of chronic federal budget deficits totalling at least $44,200bn in current US dollars." To us North Americans, that $44.2 TRILLION a year!! It turns out that nearly all of this chronic deficit is due to Medicare and Social Security. The American people can get along without those, can't they?
The FT not only dug this story up, but also interviewed the two authors of the independent report commissioned by the US Department of Treasury as well as posts on their website the report itself. What does this little gem say? You'd better be sitting down for this:
"We estimate that to achieve fiscal sustainability, an additional 16.6 percent of annual payrolls would have to be taxed away forever beginning today. Alternatively, income tax revenues would have to be hiked permanently by another two-thirds beginning immediately. Yet another alternative would be to permanently eliminate all future federal discretionary outlays.And this information simply can't find it's way into the mainstream US press.
So if the US public wants Medicare and Social Security, either it swallows a massive tax increase or it shuts down all spending funded through annual budgets: that means no war on terrorism, no war on Iraq, no war on Iran, no ambassadors, no EPA, no interstate highways, no federal employees . . . you get the idea.
So now alongside the stunningly enormous current account deficit we place stunningly enormous federal budget deficits into the foreseeable future -- that is, as long as anybody reading this is going to be alive. Don't give me that crap about American empire. Money will beat a gun every time (more accurately, money will buy the gun and then turn it against it's original owner). It's time again to revisit Manny Wallerstein's argument that "The Eagle Has Crash Landed".