Thursday, May 13, 2010

Twilight of Welfare State?

Interesting NY Times blog discussion on 'Twilight for the Welfare State?' asking whether Greece problems foretell those coming for the US and whether it is spending, taxes, both, or neither that is the heart of the problem.

Long term deficit problem in US is mostly a health care system problem. The tax code is also set in such a way now that deficits are inevitable, but long term health care cost inflation has to slow in addition to a more predictable tax system that can bring in about 20% of GDP in all federal taxes is needed or else the country will go bankrupt at some point in the next 10-40 years.

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