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.