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Burman article on budget failure published in Milken Institute Review

Mar 31, 2010

Countdown to Catastrophe

Leonard E. Burman

Milken Institute Review, March 2010

Leonard Burman

Leonard Burman


This article, written for a lay audience, discusses the causes and consequences of catastrophic budget failure. When Americas ballooning federal debt becomes unmanageable, we might simply refuse to honor our obligations, triggering a worldwide financial collapse and an economic downtown that would make the recent unpleasantness seem like a walk in the park. Or we might create enough money to pay back our creditors, domestic and foreign, triggering a hyperinflation reminiscent of failed states like the Weimar Republic in the 1930s (or, more recently, Zimbabwe) that would wipe out the savings of anyone caught holding wealth in dollars.