America’s debt is crushing and can be as scary as ghouls and goblins on Halloween, but we can escape our debt burden, says Simon Johnson, former chief economist with the International Monetary Fund and current professor of entrepreneurship at MIT Sloan School of Management. Watch Johnson talk about how his latest book, White House Burning: The Founding Fathers, Our National Debt, and Why it Matters to You, explains how responsible growth is the key to getting out of debt:
“Some people have suggested that the right name for the generation being born today is Generation IOU,” Johnson said. “I think that’s a little strong … the key to getting out of this kind of debt burden is growth. Now, you have to grow in a responsible way. You have to generate tax revenue from that growth.
“You cannot – we cannot – kid ourselves and our children that you can somehow have a continuation of the American economic and political miracle without people paying taxes. And this means people across the income spectrum.”
There needs to be a more open conversation about what the federal government does to encourage growth, Johnson said. That, combined with a “reasonable” level of taxation, tax reform, and revenue generation, will help America avoid financial devastation similar to that Europe is experiencing. Then, he added, “we’ll go back to a much more suitable participatory economy like what we had after World War II.”
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