CONVERGENCE AND ENTITLEMENTS SOMETHING'S GOT TO GIVE

Social security and Medicare are near and dear to older americans' hearts.

I will just mention this as just another implication of global income convergence.

It is not something Piketty talks about.

Krugman doesn't want to touch the topic either, for obvious reasons.

Professor Kaiser raised constitutional problems with repudiating it. Fair enough, as far as it goes.

Krugman picked up on his remark:

"writing in the periodical The Economists' Voice, David Kaiser of the National War College suggests that such a repudiation might even violate the Constitution. In that sense, the trust fund is as real an obligation of the US government as bonds held by Japanese pension funds."

 

Government obligations, owing and outstanding into a time of ever shrinking wealth, where the bulk of the source of revenue is that of average Americans, nevertheless, at some point will be curtailed sharply or repudiated, just as the income of average americans itself shrinks in the process of global income convergence.