You must watch this commencement address by Erskine Bowles, former White House Chief of Staff and co-Chairman of the Federal Debt Commission click here
I am mad at recent generations for kicking the can down the road on the really big financial issues facing our country. They have shirked this responsibility; a decision our young generation cannot make. Action is needed by politicians and from both political parties. The debt crisis we face is predictable and avoidable. However, I am convinced it will take leadership from young leaders.
To give you a frame of reference on this multi-trillion dollar crisis, 100% of federal tax revenue in 2011 was spent on mandatory spending (i.e. Medicare, Medicaid and Social Security) and interest on the debt. That means every dollar spent on the two wars, national defense, homeland security, education, infrastructure, and high value research was borrowed!
In the commencement address, Erskine Bowles points out that there are four main reasons we have these challenges:
1. Healthcare- we spent two times as much as any other country on healthcare, yet we rank between 25-50 on most major outcome measures.
2. Defense- we spend more than the next 15 countries combined on national defense, which includes China and Russia.
3. Our tax code is crazy and uncompetitive
4. Compound interest- we spend $250 billion per year on interest (the figure is only this “low” because of historically low interest rates). This is more money than we spend on the Departments of Commerce, Education, EPA, Energy, Homeland Security, Interior, Justice, and State- COMBINED.
These interest payments are going towards education, infrastructure and research in China that will lead to new jobs being located there and not here.
As Bowles puts it, we can’t solely tax our way out of this crisis, and we can’t solely cut our way out of this crisis without truly harming the disadvantaged.
So, what can you do about this?
1. Share this story with your social network.
2. Support the “Debate the Debt” campaign to have our Presidential candidates have a debate this fall solely on their plans to reduce the debt. Visit Moment of Truth
3. Talk about this issue with your friends and colleagues to share the facts so that hyperbole does not drive the debate. We need facts-based civil discourse.
America can survive this challenge. We have overcome high obstacles before. It is who we are as a country.
I’ve begun to answer Erskine Bowles call to action. Now, its your turn.