Economists say U.S. debt grew $11 trillion in one year

Published: Thursday, Aug. 9 2012 10:00 a.m. MDT

In this Sept. 13, 2011, file photo the Joint Select Committee on Deficit Reduction, led by co-chairs Rep. Jeb Hensarling, R-Texas, and Sen. Patty Murray, D-Wash., meets on Capitol Hill in Washington to hear testimony about the national debt from the Congressional budget director.

J. Scott Applewhite, Associated Press

Enlarge photo»

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.

EMAIL: jferguson@desnews.com

TWITTER: @joeyferguson

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