Folks, read the paper, it’s pretty good (although perhaps a bit too techical for some).
The title is catchy, but the paper doesn’t really address the issue of current deficits, external creditors, etc. It’s a piece solely focused on the BIG picture of inter-generational accounting. It states that there is no way in hell that US can meet its obligations promised to the older generations under Social Security and Medicare. That’s not a surprise for anybody, I think. AG told Congress something to the effect that “you can pass any laws you want, but you can’t change the laws of mathematics”. Simply put, Social Security and Medicare promises will be cut, one way or another.
Does that constitute “default” and “bankruptcy” for the US? Well, in a strict technical sense, it does, because US can’t meet an obligation it promised to its “creditors” (older generation). But that’s not what most people would consider a default. If Congress passes a law tomorrow cutting Social Security benefits, I don’t think any paper will have “US Declares Bankruptcy!” on the front page.
