Back in 2006 BBC petrol-head pundit Jeremy Clarkson wrote a book called And Another Thing: Vol. two: The World According to Clarkson. In it he refers to the work of Niall Ferguson, the writings of whom he appears very much inspired by.
The following little passage with regard to the US deficit duly follows (H/T Adam Joslyn) :
It seems there are three ways this vast deficit can be covered: they can either increase taxes, immediately, by 69 per cent or cut medicare benefits by more than a half, or stop all federal purchases for ever.
If nothing has happened by 2008, taxes will have to go up by 74 per cent. No president, of course, will ever impose any such increase, which means that with the certainty of Titanic’s fate once it had hit the iceberg, America will go spectacularly bankrupt.
It is, according to the author, an inescapable fact. Long before that happens, however, the US will renege on all its foreign debt, which will bankrupt the entire world, causing famine and maybe even some kind of holocaust. So you’ll look a bit of a Charlie if you’ve spent the previous 40 years squirrelling away £30 a week for your old age.
Let’s hope Clarkson is better at forecasting super-car performance than financial crises.
Related links:
Krugman: ‘Back at you, Ferguson’ - FT Alphaville
Big news: apparently deficits are now officially a problem - FT Alphaville
