Friday, August 14, 2009

The Future: Higher Taxes, Inflation, Treasury Defaults or All Three...

So says former IMF chief economist and current Harvard professor, Kenneth Rogoff.

The problems ahead are becoming pretty obvious to anyone who looks. China is not going to prop up the United States forever. At the same time, the U.S.government's obligations in the form of social security and healthcare are about to explode. . Rogoff specifically warns:

Asia may be willing to sponsor the west for now, but not in perpetuity. Eventually Asia will find alternatives in part by deepening its own debt markets. Within a few years, western governments will have to sharply raise taxes, inflate, partially default, or some combination of all three.

1 comment:

  1. 'The Onion' outlines a potential solution to the US national debt situation (see here).