Our country is at a critical juncture. Twenty-nine million Americans are out of work or short on work. For those with jobs, real wage growth is a distant memory. Younger Americans are searching for the American dream and finding no-help-wanted signs. Millions of retirees are reeling from huge losses they've taken on homes and savings. The few doing well are doing better, with income and wealth growing more unequal over time.
Our ongoing economic nightmare was triggered by Wall Street's systematic production and sale of trillions in toxic assets. This fraud's discovery ignited a massive financial run, leveling one financial giant after another. Overnight, everyone expected bad times and took steps to make them happen. The result is a massive coordination failure in which no one is hiring because "no one else is hiring."
We need to turn "Hire, Hire, Hire" into our national mantra and ask all mid- and large-size employers to hire in unison 5 percent more workers to restore full employment. This doesn't require more spending or tax breaks. It requires the president to use his bully pulpit to coordinate a voluntary, simultaneous increase in hiring. When all employers jointly hire, they'll find -- lo and behold! -- that they have the extra customers (demanders) to buy their extra supply.
The long-term economic picture is equally troubling. Countries that don't save don't invest. And countries that don't invest don't grow. Our country's national saving and net domestic investment rates both stood at 15 percent in 1950. Today, we are saving literally nothing, meaning we have nothing to invest. Without foreigners investing in the U.S. (which explains our current account deficit), our investment rate would also be 0 rather than a meager 4 percent.
The decline in U.S. saving is no accident. Our government has spent decades taking ever-larger sums from young savers, be they poor, middle-class, or rich, and transferring them to old spenders, be they poor, middle-class, or rich. The post-war data record a huge increase in the consumption of the elderly compared to younger people. Social Security, Medicare, and Medicaid have been the central vehicles of this Ponzi scheme, notwithstanding the enormous good they've done.
By carefully choosing its words, Congress has kept Uncle Sam's massive obligations to pay current and future retirees their benefits off the books. Today, our government is utterly broke. According to Congressional Budget Office projections, the fiscal gap separating the present value of projected non-interest spending plus the official debt and the present value of projected taxes totals a colossal $211 trillion.
This is the mountain of obligations we ignore while focusing on the $11-trillion molehill of official debt. Our fiscal gap is 14 times GDP -- a larger ratio than in Greece or, apparently, any other developed country. Eliminating the fiscal gap under the current fiscal system requires an immediate and permanent 64-percent increase in taxes, or a 40-percent cut in non-interest spending, or some combination. Delayed adjustment leaves an even bigger bill for our children.
We need fundamental structural reforms of our fiscal and financial institutions to preclude such draconian measures and protect our children from an economic future we would not seek for ourselves.
Our tax system is a disgrace. Our Social Security system is an inefficient and inequitable morass of incomprehensible rules. Moreover, Social Security is in worse fiscal shape, even counting its trust fund, than in 1983, when the Greenspan Commission "fixed" it. The costs of Medicare and Medicaid, as well as the tax break to employer-provided health plans, continue to explode. The new Health Exchanges, while promising to cover tens of millions of uninsured, could easily face exploding costs. We have also squandered America's youth and treasure in two wars that went far beyond the imperatives of national security.
The Dodd-Frank financial reform bill retained our "trust-me," highly-leveraged banking system. Consequently, our banking system stands poised to re-detonate, whether triggered again by fraud or by a collapse of European government bond markets. Finally, our energy policy endangers our children and our globe while enriching our enemies.
Our future lies in one place -- our children. Our sacred duty is to protect their welfare. We have failed in that responsibility. Our politicians are hopelessly deadlocked and blind to the common good. They are wasting our time, endangering our country's future, and unable to advance the straightforward solutions available to fix our country's problem.
We must face our problems and fix America from the ground up. We need solutions that are bold, efficient, transparent, sustainable, and fair, both across and within generations. This is why I'm running for president via americanselect.com as described at kotlikoff2012.org.
If you want to join me in fixing our country, please register at Americanselect.org and then go to https://secure.americanselect.org/candidates/all/K, find "Kotlikoff" in the Ks, and then click "Add My Support." I need 50,000 support clicks to enter the Americans Elect primary voting to be held in April and May.
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