The U.S. government’s fiscal gap grew by $11 trillion over the past year, which is 10 times larger than the reported official deficit, according to Bloomberg.
Calculations from Laurence Kotlikoff, an economist at Boston University, and Scott Burns, a personal finance columnist, calculated the fiscal gap based on the Congressional Budget Office’s realistic long-term budget forecast.
“Last year, it was $211 trillion,” said Kotlikoff and Burns in their guest column for Bloomberg. “The $11 trillion difference — this year’s true federal deficit — is 10 times larger than the official deficit and roughly as large as the entire stock of official debt in public hands.”
The authors recommend a permanent 64 percent increase in all federal taxes, as well as a 40 percent cut to benefits like Social Security and Medicare.
“Governments, like households, can’t indefinitely spend beyond their means,” Kotlikoff and Burns said.
The two co-authored “The Clash of Generations,” a book that calls for changes in the U.S. tax, health care and Social Security systems.