Is U.S. already 'bankrupt'?

"The U.S. is bankrupt. Neither spending more nor taxing less will help the country pay its bills," writes Boston University Prof. Laurence Kotlikoff at Bloomberg here.

Citing this International Monetary Fund (also this) and this Congressional Budget Office analyses of the federal budget and U.S. debt, Kotlikoff says the government must "radically simplify its tax, health-care, retirement and financial systems, each of which is a complete mess... They can each be redesigned to achieve their legitimate purposes at much lower cost and, in the process, revitalize the economy...

"The IMF is saying that closing the U.S. fiscal gap, from the revenue side, requires... an immediate and permanent doubling of our personal-income, corporate and federal taxes as well as [the Social Security and Medicare payroll taxes]... The IMF is really saying the U.S. needs to run a huge surplus now and for many years to come to pay for the spending that is scheduled... Based on the CBO’s data, I calculate a fiscal gap of $202 trillion...

"This is what happens when you run a massive Ponzi scheme for six decades... It will stop in a very nasty manner...

"The first possibility is massive benefit cuts visited on the baby boomers in retirement.
"The second is astronomical tax increases that leave the young with little incentive to work and save.
"And the third is the government simply printing vast quantities of money to cover its bills.

"Most likely we will see a combination of all three responses with dramatic increases in poverty, tax, interest rates and consumer prices. This is an awful, downhill road to follow, but it’s the one we are on."

What Kotlikoff doesn't believe is that the private sector is prepared to grow our way out of the slump.