Summary
“Insoluble insolvency” is a term coined by Jim Tozzi and associated with the Center for Regulatory Effectiveness (CRE) to describe a terminal fiscal state where a government’s long-term obligations, such as unfunded entitlements and debt service, exceed its capacity to pay. Unlike standard insolvency, this state cannot be fixed by conventional methods like taxes or spending cuts.
Key Aspects of Insoluble Insolvency:
Definition: A systemic, “beyond repair” fiscal condition, distinct from temporary insolvency.
Context: It refers specifically to the argument that U.S. government liabilities, including long-term demographic-fiscal commitments, are mathematically and politically unresolvable through standard budgetary adjustments
