Maybe Greece will scare us into fiscal sanity, but here is a possible sequence of events:
- Fiscal imbalance
- Lenders won’t lend OR Hyperinflation
- Government can’t pay salaries and benefits OR Currency loses trust
- Social unrest
- Violence in the cities
- Strong-arm rule
We can avoid that, but not without new taxes eventually.
Edward J. McCaffrey puts it this way: “We seem fated for a fiscal crisis on a massive scale, in which our public sector, unable to cut spending or raise taxes, falls off a cliff: we are a Greece waiting to happen. Thinking and writing in this vein, I have come to feel like an Old Testament prophet, exhorting my fellow citizens to awaken and repent of their evil ways, curb their spending, borrow less, start saving more, and reform the tax system to raise additional revenue in a fair and efficient way before it is too late.”
The Center for New Revenue 