The present value of the future obligations of the federal government--including Social Security, farm subsidies, Medicare, and debt--and then figure what current rates of taxation will collect, and you find a number approaching $63 trillion. That's the gap that has to be filled. Lawrence Kotlikoff, a professor of economics at Boston University did the number crunching and concluded that would take an immediate increase of 70% of all taxes or a 50% cut in Social Security and Medicare benefits.
Two other economists estimate those numbers are low. They say the gap could be as high as $97.8 trillion. They say that would take an immediate increase in governmental revenues of 61%. A fellow at the Heritage Foundation said it would take a tax hike of $11,000 per household or the elimination of all federal programs to close the gap.
The former Comptroller General of the U.S. and the head of the Government Accountability Office said the U.S. would either need to cut federal spending by 60% or hike taxes to twice their current level.
Some say if we don't do this, then China will eventually own this country by owning all our debt.
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