# on 13-Dec-2015 (Sun)

#### Annotation 423496972

 The latest estimate of Laurence J. Kotlikoff (2011) puts the gap’s present value at the bone-crushing level of $211 trillion. A more modest estimate from Jagadeesh Gokhale and Kent A. Smetters (2006, 203) estimates the gap as of 2010 at$79.4 trillion. The Congressional Budget Office’s (CBO’s) most recent long- term outlook (2011, 80) has federal expenditures in its Alternative Fiscal Scenario—not counting interest on the accumulating national debt—rising by 2085 to nearly 35 percent of GDP whereas revenues will still be below 20 percent of GDP, a shortfall of almost 15 percent. Marc Joffe (2011), a former employee of Moody’s Analytics, projects that by 2040 the national debt will have already reached more than 180 percent of GDP and that interest alone will swallow nearly 40 percent of federal revenue.

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#### Annotation 436079884

 Yet if one is concerned about the looming fiscal gap, then one needs to add not just the trust funds but the remainder of the fiscal shortfall, yielding as mentioned above a total variously estimated between $79 trillion and$211 trillion.

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#### Annotation 440798476

 A sudden and unanticipated repudiation of a private debt, so long as no one expects it to be repeated or extended to other debts in the future, has only a distribution effect: The debtor gains by the exact same amount that the creditor loses, with no net wealth effect.