Ashamed

I'm saddened. Here comes "the best of the best" scaring the daylights out of everybody in a two-full-page ad in the Sunday New York Times on September 7, 2008, with a $53 trillion hole in the federal budget supposedly caused by Social Security and Medicare entitlements. This financial group must know of the CBO study of the cause of the increase in the national debt the first four years of President George W. Bush's term. The CBO finding: 48% due to tax cuts, 37% due to war and security costs and 15% due to increased spending. The devastating affect of Bush tax cuts over the past eight years have added over $4 trillion to the debt. But averaging a $500 billion deficit each year for eight years hardly a peep out of the eminent Peter G. Peterson or Concord Coalition. I have the highest regard for both. I've worked with them. And now there is the Peterson-Walker initiative on the budget. But somehow they get lockjaw when a Republican president takes over, and only surface when a Democrat might take over.

None other than Alan Greenspan set the scene for tax cuts on January 25, 2001, when he testified that we were paying down too much debt. At the moment of his testimony, the Secretary of the Treasury reported that we were $65 billion in the red. But the Secretary of the Treasury was soon to be given his walking papers and the idle rich got a tax cut causing us to go from surpluses as far as the eye could see to increasing the debt by $4 trillion. Addressed To the Presidential Candidates and the American People, the ad states: Federal office-seekers cannot realistically be expected to propose detailed plans for Medicare, Social Security, health care, and other spending and tax reforms during campaign season. Why not? For over a year that's exactly what they've been doing. And we have almost two months to go before election day. It is the two-page ad that is unrealistic. As of this minute the Secretary of the Treasury reports a deficit for fiscal year ending on September 30th of $722 billion. Rather than advertise an impossible "53 trillion" hole, it ought advertise the reality a $700 billion deficit that one of the candidates will be faced with in January. That means that before money can be appropriated for health care, infrastructure and energy that both candidates are promising, we'll have to cut spending and increase revenues $700 billion before we have money for new programs. The next president will at best have to set a course for recovery with a budget freeze, spending cuts, and tax increases. This is exactly what was required in 1993 when we changed course and fixed the economy for its best eight years in history. Of course, it wasn't easy. Half of the Senate and House of Representatives in government committed not to pay for government is a cancer on democracy. This is the scandal that should be exposed in a two-page ad.

Bush tax cuts have caused the national debt to increase $4 trillion, requiring an annual payment of $200 billion in interest costs each and every year until the debt is eliminated. The ad should point out that the President and Congress in eight years have launched a new $200 billion spending program for nothing. This is the waste that we've got to stop next year not any $53 trillion hole.

Entitlements continue to get a bum rap in the ad. Both Social Security and Medicare are in surplus. Yes, something will have to be done about health care costs. But Social Security presently has a surplus in excess of $2.4 trillion, with another surplus this fiscal year of $198 billion. These surpluses will carry the program through 2041. In 2017, instead of adding to the Social Security surplus, we'll start spending from the surplus. The Social Security bonds will have to be honored, and the President and Congress in 2017 will be looking for money to honor these bonds. This is the reality which the ad ought signal not a $53 trillion hole.

Finally, the ad mentions a trade deficit without mentioning its principal cause outsourcing! Since NAFTA with Mexico and Permanent Normal Trade Relations with China, we have outsourced our jobs, outsourced our production, outsourced our research, outsourced our investment, outsourced our economy. Tax cuts have caused a cheap dollar, and what production has not been outsourced is now being bought up with the cheap dollar. We've even outsourced our business and financial leadership. Every attempt in Congress to put a tourniquet on the outsourcing gets knocked down by the business leadership shouting free trade, protectionism.

The banks and business in their zeal for profits have forgotten about the economy and the country. At the same time that the federal government is financing outsourcing, the states are headed in the other direction, with Tennessee putting up $577 million to get Volkswagen and Mississippi putting up $300 million to get Nissan. The local Chambers of Commerce are making every sacrifice to create jobs while the United States Chamber of Commerce lobbies to get rid of them. The country has got to get its act together. Globalization is nothing more than a trade war for market share with government as a "comparative advantage." The United States government is AWOL with its generals as a fifth column. The signatories know this and, rather than boosting the banks and multi-nationals for bigger profits with this scandalous ad, they ought to be preparing the American people to compete in globalization.

Most of all, the people of America should be preparing once and for all to sacrifice. We keep borrowing to pay for the wars in Iraq and Afghanistan. We're asking young GIs not only to sacrifice and die; but if they are lucky enough to come home, they're the ones who'll pay for the wars. We are not going to pay for them we need a tax cut! The ad ought to emphasize that tax increases will be necessary.

As a member of the Senate Budget Committee for thirty years, I have worked with the principal signatories to this double-page ad. They know the nation has to sober up from this binge. Charging the candidates and people now with an understanding of the sacrifice necessary in January is more in order rather than scaring them for a blue-ribbon commission. They ought to be ashamed.

Comments

[TRex86]

It's disturbing that this post and Bonddad's latest have so few comments. Yet they are at the core of what this country faces in the next 30 years. In eight years we have gone from peace, prosperity and a fiscally responsible federal government to reckless, profligate war-mongers. Moreover, when you put representatives of the ruling class in charge they will serve their masters even if it means the destruction of our economy. Sic transit gloria mundi.

[DSMason]

The burgeoning federal deficits, debt and unfunded liabilities have been made much worse, of course, by the Bush administration, but debt problems are more long-standing, deeper and more widespread than that. The U.S. is also facing record high trade deficits and energy prices, and the federal government's fiscal profligacy is compounded by the lowest household savings rate since the Great Depression, and near record high levels of mortgage debt, mortgage foreclosures, and credit card debt. These are all issues that Peterson raised in his important 2004 book "Running on Empty" and which are at the core of my own forthcoming book on "The End of the American Century." The U.S. is in for some tough times.

[mgloraine]

You are absolutely right Senator, but your observations will not be discussed or even mentioned on the evening news because it doesn't hook in to the lowest-com­mon-denomi­nator mentality which controls the media circus around the campaigns. You didn't mention "lipstick" or "pigs".

How are people supposed to pay attention to a lesson in basic economics and fiscal discipline when the other class has a pretty girl jumping out of a cake? All the noise and commotion is very distracting, and they look like they're having more fun than us...

[SunnyDay]

Shouldn't all those McCain supporters out there be a little concerned that he feels that economics is one of his weak areas? I don't think Palin is going to be of much help in that area.

[Rondo]

Au contraire, Ms. Palin knows how to field dress a moose.

[Kassandra]

I thought the republicans had already stolen SS? You know they made the baby boomers pay double under Reagan and now, they're blaming us for the problems! Meanwhile we take care of our kids who can't find jobs in this destroyed economy and our parents whose house have lost their value and whose medicare has been ruined by "Part D".

So many Americans wanted to go to war after 911. they really led us down the garden path, but now, when the chickens are coming home to roost, we don't wan to pay for our follies. We'd rather look at Sarah Palin ( what a babe!)

I've watched this country turn into a third world nation and a third rate power for the last 8 years. What ARE we going to do? We are the most spoiled people on earth. But I think that's about to change whether we want it to or not.

[Hajji]

Senator Hollings,

You are sorely missed by your constituents.

We no longer feel represented.

Your seat is filled by the ass of an ignorant ass.

Keep doing what you can from the outside, inside would've been better, though.

-T

[biwee]

In about 2017, when the so-called Social Security Trust Fund (a pile of IOUs) is called to repay the
debt to Social Security (excess paid in Social Security has been used to fund normal govt operations, stupid pork projects, and unnecessary wars of choice), WHAT will the US Congress do??? It is clear that BORROWING to repay the debt is STUPID. Do YOU borrow money to make your mortgage or car payments (if you have one)??

[Kassandra]

I used to....guess what happened? Bankruptcy

[Aaror]

D'oh!
Medicare is NOW selling T-bills, vice "medicare is not selling T-bills" sorry.

[nostalgia]

Thank you, Senator Hollings, for giving us a cold shower of reality which is much needed. It would be very trustworthy for Senators Obama and McCain to address this issue but I guess no one really wants to talk about it for fear of losing votes. Senator Obama should step up the plate and be brave enough to address this urgent problem. This is called leadership. Enough of talking about moose, hockey mom, lipstick. This
tantalizing talk does not bring home food and security to the population.

[WorldGriot]

Nostalgia:

You have your Senators mixed up. Senator Obama IS trying to talk about this but John McCain keeps mudding the waters with the hocky moose lipstick crap. are you paying attention or are you just one of those trying to intentionally mislead the nation?

[vipersdad]

Please go to www.barackobama.com and start reading. You will quickly find out that he has addressed this issue in his economic plan.

[Aaror]

Senator Hollings,
Sir, I am sorry to disagree with you, but 2017 is the year to worry about, not 2042.
Medicare is not selling T-bills instead of buying them. In 2017, Social Security will do the same. At that point one of two things will happen. Either someone (China or Saudi Arabia) will want to buy half a trillion dollars of US debt every year, making us a dependancy of the nation which does so. Or, even worse, no one will, and we will have to pay the debt we have accumulated. Of course, this assumes that we have minimal inflation and that no one realizes this problem. If we cannot maintain both of those happy states, our interest rate will rise, and so will the interest on the debt. This will accellerate the demise of the dollar and perhaps our nation.
Imagine the US with the problems the Italian Government used to have with the Lire. Nuf said?
V/r
Aaror

[RepugsOut08]

Thank you for posting this. I think Obama missed a great opportunity when he was sparring with Bill O'reilly over tax increases. O'reilly was clearly upset that the days of enjoying the fiddling while Rome burns tax policies of George Bush, might be coming to and end.
I think, rather than trying to sooth O'reilly's fear, Obama should have asked Bill what sacrifice he'd been asked by his country to make since the wars in Iraq and Afghanistan began.
Clearly, poor and middle class families have offered up plenty in both blood and capitol. In loved ones absent from home on military tours lasting far too long.
What did Bush ask of the Americans with the most to lose financially if the terrorists took over?
Bill O'reilly and his right wing talk show buddies talk a good game when it comes to patriotism, but seem to see sacrificing a few percentage points on their million dollar salaries as unfair.
I know many wealthy people don't agree with the tax cuts, and want to see the deficit brought under control. These are the true patriots.

[ChaoticGood]

America is living on its "charge card" funded by our suppliers. Until that ride is finished no move will happen to change rise of the debt. I think we are on course for a monetary crisis like Brazil. When gasoline hits 5.00 and a loaf of bread is 10.00, look out for a new improved "tamper resistant" currency to be printed. Americans will not vote for anyone who will cut their services and raise their taxes. It will be much easier to nationalize key industries, fix prices for commodities and print new money. It does not matter if McCain or Obama win, they will have to do this to keep the American markets functioning. Witness the nationalization of FannieMae and FreddieMac as proof of what I say.

[Aaror]

we could just repudiate the debt...

[Marlyn]

"Witness the nationalization of FannieMae and FreddieMac as proof of what I say."

The reason FannieMae and FreddieMac failed is because they were privatized. They started out nationalized and it worked fine for many years. Then Republican greed took over.

[Dynamohum]

Boooosh and all of his cohorts (politicia­ns,corrupt CEO's, corrupt corporatio­ns,mortgag­e bankers,wall street traders) should be tried convicted jailed and then, we the people should be awarded damages to restore our treasury, government and our collective future. Enough!

[GJMandinka]

Great post! Political disinformation campaigns are nothing short of treason. There's uninformed and wrong and there is the conscious attempt to manipulate the truth (and the voters) for political ends.
Nice to hear someone mention outsourcing and the elimination of trade protections. By and large, you never hear about how free trade is destroying our domestic economy.

[jfor]

The problem in America is that most people do not know what a Billion is. To most it is just a number tossed around by politicians and presidents. One billion dollars is one thousand million. One thousand million sure sounds like a lot more than one billion dont it?

[Marlyn]

The British call a BILLION a million million (1,000,000­,000,000).

[vipersdad]

a billion is a thousand million. Never heard a Brit say that, but what the heck - they also say alumin-eeeum

[LiberalLo]

You have posted the numerical equivalent of 1 trillion. A billion has 9 zeros, not 12.