America, the New Argentina

A few weeks ago, Alan Greenspan got in front of the Senate Budget committee and told them that at current levels of taxation and expenditure, the country was headed towards unsustainable budget deficits. Now it seems that big thinkers on both ends of spectrum are joining the doomsday bandwagon. Yesterday, in a briefing on Capitol Hill sponsored by the Brookings Institution, Stuart Butler, head of domestic policy at the Heritage Foundation, and Isabel Sawhill, director of the Brookings Institution’s economic studies program, sat down with Comptroller General David M. Walker to lay out what they see as an impending budget crisis.

The Washington Post mentioned one interesting tidbit:

With startling unanimity, they agreed that without some combination of big tax increases and major cuts in Medicare, Social Security and most other spending, the country will fall victim to the huge debt and soaring interest rates that collapsed Argentina’s economy and caused riots in its streets a few years ago.

That’s right, big thinkers from the left and the right agree that left untouched, our economy is headed the way of Argentina. The Argentines are still struggling to restart their economy. Comparisons have also been made to the Asian financial crisis of the 1990s and its drastic effect on shares around the world.


— Theo LeCompte