House Republicans — Raise the Debt Limit, But Stick to Your Fiscal Guns. Our Country Is Dead Broke!

“How do you come up with 7.7 percent of GDP annually in extra taxes? One way is to immediately and permanently raise all federal taxes by 41.3 percent! Another is to immediately and permanently cut all federal spending, apart from interest payments on official debt, by 35.3 percent! These adjustments are miles beyond what anyone in Congress realizes is needed. The reason is they are looking at the wrong number — the official debt, not the fiscal gap. If I’m Speaker McCarthy, I start by passing THE INFORM ACT — the bipartisan Intergenerational Financial Obligations Reform Act introduced by Senators Thune and Kaine in 2013. (FYI, I helped write the bill.) This bill compels the CBO, OMB, and GAO to do fiscal gap accounting on a routine basis. Again, this accounting puts all our off-the-books debts on the book.”

Published by markskidmore

Mark Skidmore is Professor of Economics at Michigan State University where he holds the Morris Chair in State and Local Government Finance and Policy. His research focuses on topics in public finance, regional economics, and the economics of natural disasters. Mark created the Lighthouse Economics website and blog to share economic research and information relevant for navigating tumultuous times.

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