The Financial Times is reporting that leading nations are still piling up debt even though there's technically been an economic recovery. In particular, the IMF is looking at US debt over the next decade and predicting that it'll be unsustainable if we don't do something quick. Of course, what conservatives want to do is slash Social Security and Medicare while letting the government keep all those funds we've paid into the system.
The IMF, on the other hand, is suggesting that a 10% value added tax (VAT - basically a national sales tax) along with increasing income taxes on rich people and adding a carbon tax like Denmark has done would raise revenues -- income to the US treasury -- by about 4.5 of GDP, which would largely solve the problem of the deficits Reagan and Bush left us. These are actually very doable solutions, but Republicans -- representing the interests of the top 1 percent of big corporations and the top half of one percent of very rich individuals -- will fight them tooth and nail. The question now is whether the Obama administration will have the political will to do it, and whether -- while Karl Rove is raising hundreds of millions of dollars in private corporate money to destroy Democrats in the 2010 and 2012 elections -- there will be any progressive politicians left to help things along.