David Stockman
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Governments are broke?California, Illionis, New Jersey?and the federal government is not far behind," he said.After appearing on CNBC, Stockman said in a follow-up interview that the following moves could help solve the dismissal economic picture in the US:
- Raise revenue across the entire population by a large magnitude to pay our (government's) bills; probably a half trillion dollars a year.
- Social Security and Medicare: Cut benefits for better-off retirees by $100 billion a year through a means test for retirement entitlements.
- Reduce defense spending by at least 20 percent from planned levels (by 2015), which is projected at about $800 billion.
- Cut domestic discretionary spending by $100 billion?transportation, national parks service, education, farm subsidies, business subsidies (such as ethanol plants).
Stockman believes these solutions will be feasible if a "big breakdown" in the
bond market occurs, which he believes will happen and will be forced on the US, as in the case of the
PIIGS.
"You can not issue debt indefinitely and get away with it," he said.
Bond market breakdown OMG!
