Americans will need to pay much heavier taxes and accept less from public healthcare to put state finances on a sustainable track, according to an IMF study published on Monday.
“The United States is facing an untenable fiscal situation due to the combination of high fiscal deficits, an aging population and rapid growth in government--provided healthcare benefits,” three IMF economists, Nicoletta Batini, Giovanni Callegari and Julia Guerreiro, said in the report.
The economists analyzed the large US public deficit and debt levels and their relation to the demands aging Baby Boomers will place on the government’s Medicare and Medicaid healthcare programs, while the birth rate lags at a record low.
In their report, titled “An Analysis of US Fiscal and Generational Imbalances: Who Will Pay and How?” they said the problem lay in government entitlement programs and especially healthcare — among the most expensive in the world — that face rapidly rising costs in coming years.
Under their “baseline scenario,” Americans need to pay more taxes and the government must cut spending on Baby Boomers — those Americans between about 45 and 65 — and their immediate heirs.
Such steps “would go a long way in returning the United States to a fiscally sustainable path.”
Fully eliminating current deficits and the long-term shortfalls on social plan commitments for the current generation “would require all taxes to go up and all transfers to be cut immediately and permanently by 35 percent,” they said.
“A delay in the adjustment makes it more costly,” they wrote. “Unless currently living Americans pay more in net taxes or unless government spending on current generations is curtailed, future Americans will face net tax rates that are about 21.5 percentage points ... higher than those facing current newborn Americans.”
The study came amid budget tensions between US President Barack Obama’s administration and opposition Republicans over taxes and spending, and as the spiraling US public debt nears its statutory ceiling of about US$14.3 trillion. The Treasury Department said debt totaled US$14.19 trillion as of Feb. 28.
The US is likely to hit its debt limit sooner than thought, the Treasury Department said on Monday, pressuring lawmakers to raise the ceiling or face a possible government default.
“The Treasury Department now projects that the debt limit will be reached no later than May 16, 2011,” the Treasury said.
The department previously estimated it would hit the ceiling by May 31.
If it is not raised, the US would only have weeks before it runs out of cash to pay its bills, according to government estimates.
“Increasing the limit is necessary to allow the United States to meet obligations that have been previously authorized and appropriated by Congress,” US Treasury Secretary Timothy Geithner said in a letter to lawmakers.
He warned that military pay, social assistance payments and tax refunds could be among the first things to be blocked.
“Default would cause a financial crisis potentially more severe than the crisis from which we are only now starting to recover,” Geithner said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
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