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Financial System Will Collapse Just a Matter of When – Professor Laurence Kotlikoff

Wednesday, March 18, 2015 19:37

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(Before It's News)

TND Videocast Spotlight: Greg Hunter’s USAWatchdog.com

Renowned economist Laurence Kotlikoff recently testified at the U.S. Senate about the runaway U.S. budget. How bad is it? Kotlikoff says, “I told them the real (2014) deficit was $5 trillion, not the $500 billion or $300 billion or whatever it was announced to be this year. Almost all the liabilities of the government are being kept off the books by bogus accounting. . . . The government is 58% underfinanced . . . . Social Security is 33% underfinanced . . . . So, the entire government enterprise is in worse fiscal shape than Social Security is, but they are both in terrible shape.” So, how much is America on the hook for in the future? Kotlikoff contends, “If you take all the expenditures that the government is expected to make, as projected by the Congressional Budget Office (CBO), all the spending on defense, repairing the roads, paying for the Supreme Court Justices’ salaries, Social Security, Medicare, Medicaid, welfare, everything and take all those expenditures into the future . . . and compare that to all the taxes that are projected to come in, and the difference is $210 trillion. That’s the fiscal gap. That’s our true debt.”

Professor Kotlikoff goes on to say, “It will collapse. It is just a matter of when. I can’t say when, but all I can say it’s going to be too late. . . . We are seeing signs of this in the economy, but we are not picking it up that clearly. The macro economy is not doing all that well.” Kotlikoff goes on to say, “I think our financial system is really built to fail because it combines two things which really haven’t been addressed. . . . It combines leverage, borrowing by the financial middlemen and then investing in things that they don’t tell you they are investing in. So, there is opacity and leverage. These are the two major problems for the banking system. What we need to do is get rid of the leverage and get rid of the opacity. We need full disclosure of the investments of our financial institutions.”

Click here to read the rest of Greg Hunter’s write-up and to access the active comment section.

After the Interview:

For a copy of Professor Kotlikoff’s best-selling new book “Get What’s Yours: The secrets to maxing out your Social Security” please click here.

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About Greg Hunter:

Mr. Hunter is the producer and creator of Greg Hunter’s USAWatchdog.com. The site’s slogan is “analyzing the news to give you a clear picture of what’s really going on.” The site will keep an eye on the government, your financial interests and cut through the media spin. Greg Hunter’s USAWatchdog.com is neither Democrat nor Republican, Liberal or Conservative. Before creating and producing the site, Greg spent nearly 9 years as a network and investigative correspondent. He worked for ABC News and Good Morning America for nearly 6 years. Most recently, Greg worked for CNN for shows such as Paula Zahn Now, American Morning and various CNN business shows. Greg encurages feedback and welcomes comments. You may also support USAWatchdog.com by clicking here to donate. Reprinted with permission.