His approach to government policy analysis, which is likely to put him on the Nobel short list one day, has rapidly been adopted by at least 25 nations. Moments later, speaking at a meeting jointly sponsored by the Dallas Federal Reserve Bank and the National Center for Policy Analysis, Professor Kotlikoff said that unless there were major policy changes the lifetime tax rate on the next generation would be nearly 50 percent. That's a lot higher than the 30 to 33 percent that current taxpayers have experienced. Worse, the longer the delay, the more difficult it would be to make changes anyone could imagine. In the event this is all new to you, let me explain.
Governments make promises in two forms.
We read a lot about this type of promise because lots of people understand it, even if the numbers are in trillions. Very few people, including most politicians, understand this because it more complicated. Which brings us to the unpublished paper. Jagadeesh Gokhale at the Cleveland Reserve Bank and Benjamin R. Page and John R. Sturrock at the Congressional Budget Office, have updated the generational accounts. I called Mr. Gokhale and asked for a copy.