International Monetary Fund Report: America Doomed

Weigel
Reporting on Politics and Policy.
April 4 2011 10:31 AM

International Monetary Fund Report: America Doomed

Here's your nightmare fuel for the day: "An Analysis of U.S. Fiscal and Generational Imbalances: Who Will Pay and How?" The IMF crunches the numbers and warns that only huge tax increases and entitlement cuts can save America.

Under most scenarios, the fiscal adjustment needed to eliminate the fiscal and generational gaps would entail significant adjustments in taxes and/or transfers. Under the baseline scenario, for example, the federal government can restore fiscal balance by raising all taxes and cutting all transfer payments immediately and for the indefinite future by 35 percent.

Were the U.S. government to finally repeal the tax cuts enacted in the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), the Jobs and Growth Tax Relief Reconciliation Act of 2003 (JGTRRA), and were the IPAB to succeed in curbing healthcare spending growth as provided in the IPAB mandate, reining in the fiscal gap would still require an immediate and permanent increase in all taxes and cut in all transfers of 26 percent.

Advertisement

If some Hill staffer prints out the 39 pages of this and puts it on his/her desk, that's as far as any discussion of tax increases will get in Congress. The very serious discussion we're about to have about spending will start and end with entitlement cuts -- if we're lucky. If you paid any attention to the 2010 campaign, you'll recall that Republicans promised to stop all tax increases and restore funding to Medicare . Of course, the Republican argument is that tighter fiscal policy and lower taxes will create another economic boom that allows the economy to grow right out of these projections.

David Weigel is a reporter for Bloomberg Politics

TODAY IN SLATE

Culturebox

The Ebola Story

How our minds build narratives out of disaster.

The Budget Disaster That Completely Sabotaged the WHO’s Response to Ebola

PowerPoint Is the Worst, and Now It’s the Latest Way to Hack Into Your Computer

The Shooting Tragedies That Forged Canada’s Gun Politics

A Highly Unscientific Ranking of Crazy-Old German Beers

Education

Welcome to 13th Grade!

Some high schools are offering a fifth year. That’s a great idea.

Culturebox

The Actual World

“Mount Thoreau” and the naming of things in the wilderness.

Want Kids to Delay Sex? Let Planned Parenthood Teach Them Sex Ed.

Would You Trust Walmart to Provide Your Health Care? (You Should.)

  News & Politics
Politics
Oct. 22 2014 9:42 PM Landslide Landrieu Can the Louisiana Democrat use the powers of incumbency to save herself one more time?
  Business
Continuously Operating
Oct. 22 2014 2:38 PM Crack Open an Old One A highly unscientific evaluation of Germany’s oldest breweries.
  Life
Gentleman Scholar
Oct. 22 2014 5:54 PM May I Offer to Sharpen My Friends’ Knives? Or would that be rude?
  Double X
The XX Factor
Oct. 22 2014 4:27 PM Three Ways Your Text Messages Change After You Get Married
  Slate Plus
Tv Club
Oct. 22 2014 5:27 PM The Slate Walking Dead Podcast A spoiler-filled discussion of Episodes 1 and 2.
  Arts
Culturebox
Oct. 22 2014 11:54 PM The Actual World “Mount Thoreau” and the naming of things in the wilderness.
  Technology
Future Tense
Oct. 22 2014 5:33 PM One More Reason Not to Use PowerPoint: It’s The Gateway for a Serious Windows Vulnerability
  Health & Science
Wild Things
Oct. 22 2014 2:42 PM Orcas, Via Drone, for the First Time Ever
  Sports
Sports Nut
Oct. 20 2014 5:09 PM Keepaway, on Three. Ready—Break! On his record-breaking touchdown pass, Peyton Manning couldn’t even leave the celebration to chance.