April 2 The United States must fix its long-term
fiscal problems "at some point down the road" by raising taxes,
cutting spending, or through some combination of the two, a top
Federal Reserve policymaker said on Tuesday.
But "the issue doesn't have to be fixed today, in 2013; it's
a problem that's going to come in the early part of the next
decade," Minneapolis Federal Reserve Bank President Narayana
Kocherlakota told a business group in Grand Forks, North Dakota.
In seven to 10 years, the government's obligations to fund
medical and retirement-living costs for the aging U.S.
population will outstrip its income from taxes, Kocherlakota
said, adding the government will need to bring its expenses in
line with its revenues.
"I think that offering guidance to the public about the mix
of the tools that's going to be used to address this problem is
going to be useful," he said. "Having more certainty about how
that resolution will take place would be good."