After all the talk of dogs on roofs and birther conspiracies, maybe we can start talking about real stuff. What do we want government to do? And how will we pay for this?
David Wessel, economics reporter for The Wall Street Journal, has a new book. It’s called “Red Ink.” In it he addresses our budget crisis in a simple, straightforward way. It’s a little book, with the actual text only covering about 150 pages. Wessel highlights important points in bold text, making it easy for the reader to get the big picture.
“Nearly two-thirds of annual federal spending is on autopilot and doesn’t require an annual vote by Congress.”
“Firing every federal government employee wouldn’t save enough to even cut the deficit in half.”
“About $1 of every $4 the federal government spends goes to health care today, and that share is rising inexorably.”
Stunning! When Wessel quotes numbers, he puts them in terms that laymen can understand. He says that tax loopholes are just another form of spending. Through our tax code, we grant loopholes that cost the government $1.1 trillion, or nearly half of total annual collections. There are easy to read graphs and pie charts that drive home our dilemma.
He quotes Sen. Rob Portman’s assessment of the problem. Portman says, “It’s two words: health care.” The sheer size of the baby boom generation, longer life spans and exploding costs are jeopardizing the system for future generations.
Wessel also addresses Social Security and defense, two more sacred cows in our system. He doesn’t sugarcoat the history or the current state of affairs, and he doesn’t pull punches on either party. He says we can’t fix the problem by addressing the small stuff. The numbers just don’t add up. A quote from Washington PR specialist Stan Collender sums up the problem. “The average person doesn’t want less government. They just want government to cost less.”
The proposal to change Medicare to a “premium support” system for everyone under the age of 55 has hit me where I live. I’m 53. You bet I’m paying attention! But everyone needs to participate in this conversation. The decisions we make in the next few years will affect all of us.
So turn off the television and the radio, and get a good book. Get informed, then get involved. Your life depends on it!
Nancy Lottridge Anderson, Ph.D., CFA, is president of New Perspectives Inc. in Ridgeland — (601) 991-3158. She is also an assistant professor of finance at Mississippi College. Her e-mail address is email@example.com, and her website is www.newper.com.