Peter G. Peterson, founder of Blackstone, the private equity giant, and former chairman, Lehman Brothers, backed by the support of 55 former US officials, is calling on president Obama to instantly organize a bipartisan effort to deal with the nation's debt and bloated federal budget.
In a personal interview with me in late December, Peterson, chairman of his own foundation, admitted, "What I fear is that we need a crisis to educate the public on the seriousness of the problem. What I hope is that the president will decide this is a major national issue, spell out what needs to be done, and what kind of a future we want."
Peterson is adamant; "We need a positive view of the kind of America will emerge," he told me. "We need an elevated national dialogue leading to a bipartisan agreement."
If not, the former secretary of commerce in the Nixon administration warns, "The implication if we dont do something is clear. The interest costs will begin to consume the budget."
Indeed, a study commissioned by the Peterson Foundation shows that by 2027 interest on the federal government's debt will be the largest item in the budget -- far more than the amounts spent on education, infrastructure and research and development.
By 2055, if there is no reform, the interest expense for servicing U.S. Treasury debt will require 100% of the US government's tax revenues, according to figures supplied by the Peterson Foundation.
Peterson is plainly worried about the nation's debt weakening its influence in global politics. "If the current trends continue, the exploding amount of U.S. debt owned by foreign lenders leaves us vulnerable to their economic and political demands," his latest report suggests.
Peterson recently polled 55 former treasury secretaries, former members of the Council of Economic Advisers, former Federal Reserve Board governors and previous directors of the Office of Management and Budget -- and was heartened that to a man they agreed wholeheartedly with him that the long term structural financial outlook of the United States is not sustainable unless there are major cuts in the federal budget as well as tax increases.
Now, he is trying to organize a global pressure group made up of other nations with too much debt and too large an elderly retired population to tackle solutions for this widespread quandry in a unified fashion. The Peterson Foundation is preparing projections for debt servicing across the globe and trying to estimate the total costs for funding the aged everywhere -- to show that the rising cost of medical care and social security plagues more than just the U.S.
The painful lesson; to underscore there are going to be far fewer taxpaying citizens and that as a result -- social insurance programs all over the world are not being funded sufficiently.
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Americans are also going to go through an awakening about their military spending. They will rethink about spending billions on NATO, foreign military aid to Egypt, Israel and Jordan, and so on.
It is true that it would not take that much to balance the budget by taxing corporations and rich people slightly more, but they practically run DC with their millions of political donations.
The more the honest news media do in-depth reporting, the sooner the public will wake up.
The National Commission on Fiscal Responsibility and Budget Reform was initiated by President Barack Obama and parallels the Clinton-lead Bipartisan Commission on Entitlement and Tax Reform of 1994. It strongly mirrors the 1994 charge to cut "entitlement" spending (spending that aids individual citizens) as the way to cut the deficit, rather than other kinds of spending that benefits corporations.[9]
The Commission not only has many of the same players involved in the Bill Clinton-initiated 1994 effort to dismantle so-called "entitlement spending," but more significantly, it is rife with those who were involved with the Peterson Foundation-funded America Speaks town halls.[10] This includes the likes of Paul Ryan, Judd Gregg, and Kent Conrad, all of whom, not surprisingly, also partook in the Peter G. Foundation-lead April 2010 "Fiscal Summit," also known as America’s Crisis and A Way Forward."[11][12][13] This summit also included names like Robert E. Rubin, Bill Clinton, then Director of the Office of Management and Budget Peter Orszag (who now works for Citigroup),[14] Alan Greenspan, and David M. Walker on its roster.[15][16]
http://www.sourcewatch.org/index.php?title=Peter_Peterson
He wants to gut Social Security. He wants to gut every form of retirement all over the world. Be it governmental or Private.
Balanced budgets will permanently shed millions of jobs from the American economy, with debt reduction shedding millions more. This is why deficit and debt reduction should be done gradually during economic up tics, as opposed to recession down ticks (thanks alot GW).
Can you feel the pain yet? It's coming in the form of a permanent 15-25% per capita reduction in our standard of living as the tab for our 30 year free lunch comes due. (Thanks a lot Ronald Regan and Bush the 1st)
The promise by those dems is that they would not increase spending for the foreseeable future. See the problem is NOBODY BELIEVES THAT and so the tax hike probably won't find enough "yes" votes.
This is why giving your word matters, but when lawmakers consistently say one thing and do another, all trust is lost. That is what is really wrong with our country. There is a huge lack of trust all the way up to the WH.
IMO it is o.k. for a lawmaker to change his/her mind. However the caveat should be they are forced to speak publicly about the switch. They don't need to beg forgiveness, but just tell it to us straight. So what happened that changed their mind?
So in the eleventh hour Illinois is trying to pass a huge tax increase on the people without their approval and participation. This is why millions do not vote in this country and why millions today loath what the government is doing to this country. The citizens are treated like school children instead of rationale adults that need to be a part of the solution.
Why isn't the solution eliminating the interest?
I guess servicing Interest on US Treasury debt is more important than, you know, actual, tangible, useful things. And while we're at it, let's worry about the year 2055. I sure hope some social programs have been cut by then, or we'll have more Interest debt than ever.
If the top US non financial companies are sitting on $1.9 TRILLION in cash and making record profits then its time for them to pay their fair share.
1.) Cut military spending in half. When we're spending more than the rest of the world combined, that's a pretty good indication that we have poor stewardship of our money. Europe can pay for their own defense. Close some overseas bases as proposed by Ron Paul/Barney Frank and save $100B/year on that alone. There is no Keynesian effect here at home spending $100B abroad.
2.) Get rid of the Drug War (at least $70B/year). Legalize pot, and provide maintenance prescriptions for heroin and cocaine/crack. I think the savings would be more substantial than stated, because a lot of crime isn't categorized as drug crime, although it occurs to raise cash to feed black market cash flows.
3.) Make our businesses more competitive by adopting single payer health insurance, as many of our competitors do. The current model of health care is fine if there is no free trade, but with free trade, we need to make our overhead (health costs) not cost more then competing nations' overhead.
The ONLY way to fix the mess is to cut spending.
And what would you cut?