IS THE UNITED STATES GOING BROKE?

The current debt estimate represents the present value difference between all the government's projected future spending obligations and all its projected future tax receipts. This gap takes into account the government's need to service official and unofficial debts, including its obligation to pay baby boomers their Social Security and Medicare benefits.

But there are other obligations, too, that aren't calculated into the national debt for which the government remains at risk, says Kotlikoff. So, how do we pay for this, ? We have two options:

• Double employer plus employee payroll tax rates immediately and permanently, taking another 15 percent out of our pockets each payday.
• Cut benefits; Medicare could be scaled back to keep its cost growth in line with the growth in the economy.

Even though there is still time to put our fiscal house in order, the longer we wait, the more likely we are going to get hit by a true financial and economic earthquake...

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