Economist Michael Tanner of the Cato Institute tells Newsmax.TV that the U.S. economy is more debilitated than most European countries.
“If you actually look at debt in the U.S., the deficits that we are running and the debt that we are accumulating, we are actually in a worse fiscal position than most of the countries in Europe,” the senior fellow at Cato said.
“The problem is — it’s an ongoing thing in this country,” he insisted in the exclusive Newsmax.TV interview.
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The United States has only a “few years before unfunded entitlement programs begin to really kick in and those things become uncontrollable,” said Tanner, whose National Review (Online) commentary on the topic also appears on Cato’s website. www.cato.org/publications/commentary/were-already-europe
Tanner also opined that Republican presidential candidates are missing a big opportunity to address this looming fiscal crisis.
“It mystifies me about how little Republicans talk about the fiscal issues out there,” Tanner said.
“The president’s budget runs deficits indefinitely in the future. He never balances the budget. The fact that he wants to accumulate another $7 Trillion of debt by 2022, and what are we out there talking about? Newt Gingrich wants to put a colony on the moon. Rick Santorum is arguing about birth control. Mitt Romney is talking about what kinds of cars he drives and how tall the trees are in Michigan. Shouldn’t we really be talking about the fact that we are broke?
“We are going to have to ask people to sacrifice some of the government benefits and programs they are currently getting. Candidates don’t like to tell people no.
“They end up twisting themselves into knots talking about how they are going to cut taxes and not how they are going to cut spending,” Tanner said.
He also warned people against taking solace in the fact that foreign investors still are pouring money into the U.S. economy via Treasury bills.
“The U.S. dollar looks a lot better than the euro right now as a place to park your money. But that’s a pretty low bar.”
“If Europe begins to straighten its debt out and the euro stabilizes, and we expect that in a couple of years that it would, than it certainly will be a better place than the United States, which in the long run is in worse fiscal shape,” Tanner said.
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