Kitchen outlet faulty. Checked breaker(fuse), OK. Removed outlet from wall, with two prong electrical tester; no current from BLACK and WHITE wires. Current on both BLACK and GROUND, also WHITE and GROUND. What is the problem?

Question, how did you get current to flow through a vacant (nothing plugged in) receptacle?

May I suggest you purchase a volt ohm meter and set the meter to a Voltage selection greater than 120 VAC, then inset the red probe into the shorter slot and the black probe into the longer slot and let us know what the voltage at the outlet is, please.

You mean you have voltage on black and ground and white an ground.

What you have is an open neutral somewhere on this circuit ahead of the receptacle you are testing.
Turn off the breaker and see what other receptacles are on this circuit. Check every one for a faulty connection on a white wire. Be warned it may not be something you can see. A poor connection is not always obvious.