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Arnold Kling on America's fiscal future.

4:55 PM, Apr 9, 2010 • By MATTHEW CONTINETTI
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Arnold Kling responds to Paul Krugman's Friday column:

The next time the United States hits a debt-to-GDP ratio of 100 percent or more, we will look much more like Greece in 2010 than the United States in 1945. That is, our government will be in a state of paralysis, the public-sector unions and pensioners will be in a state of hysteria, and defense spending will be only a few percentage points of GDP. Like Greece, we will be devoid of options. At that point, "inflating away the debt" will not be some mild, harmless act--it will require a virulent inflation and/or capital levy that wipes out the savings everyone except those who have found safe havens overseas.

Have a nice day.

Is there a way to avoid this fate? So far, only one congressman has put forward a potential solution that does not involve economically harmful taxation and inflation. Others need to step up to the plate.

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