Peter's Remarks at the Peter G. Peterson Foundation Launch
JULY 10, 2008
NEW YORK CITY
BY: Peter G. Peterson
I am delighted to greet you, to thank you for coming, and to thank Bob Rubin and David Rockefeller for co-hosting this event. And, I would like to doubly thank Bob for agreeing to co-chair our advisory board. We will be announcing more of our advisory board very soon.
I feel much more secure standing here than on other occasions where the likes of Ted Sorensen and Les Gelb felt free to assault me. On the last such occasion, Ted wounded me permanently with the line, "Peterson is the ultimate self-made man. And, oh how he worships his creator!!"
Gentlemen, this time, I paid for this microphone.
What are the missions of the Peterson Foundation?
I've been around a very long time, and I've never seen so many long-term challenges that I would term as undeniable, unsustainable, and yet politically speaking, untouchable.
As Herb Stein once said, "If something's unsustainable, it tends to stop." And if you don't like that one, there's the old saying, "If your horse dies, we suggest you dismount."
We act as if we can ride this horse indefinitely.
We will focus most of our initial efforts on three key unsustainable challenges.
Currently, America is projected to have $53 trillion in today's dollars in federal liabilities and unfunded entitlement promises such as Social Security and Medicare. These amount to more than $440,000 per household, nearly ten times the annual income of the average household. Over time, taxes would have to double to pay for them. This is unthinkable. Slipping this huge hidden check of debts and taxes to our children is a gross example of taxation without representation and, if not unconstitutional, we should at least declare it immoral.
Second, our unprecedented current account deficits-energized by a nearly $800 billion trade deficit-and also, unprecedented levels of foreign debt. Increasingly, we no longer owe huge debt to ourselves; we owe it to foreign investors. We are leaving ourselves very vulnerable to economic and geopolitical risks that no great country should be taking. We simply must reduce these imbalances and increase national and personal savings.
And finally, ballooning health care costs, far higher than the rest of the world and racing toward 20 percent of GDP; our #1 fiscal problem by far, that threatens the very competitiveness of our economy.
Furthermore, spending these unthinkable amounts on mandatory entitlement programs means that other critically needed investments will inevitably and increasingly be crowded out, as indeed they are already-crucial investments in our children, their health and their education, in infrastructure, and research and development.
By choosing to spend these huge amounts on entitlements and health care, we risk not making these critically needed investments in our future, and we seriously risk letting the promise of the American dream slip away.
Now, what else makes this foundation different? There are now many sensible reforms out there. The real problem is doing something about them.
In other words, we are not just another think tank; our mission is to create awareness and bring Americans together to achieve real results.
Why is that so difficult? It seems to me there are two problems: political, and cultural. Politically, our elected representatives no longer consider public office as a temporary job, as our founders imagined, but as a career. And they have decided, wrongly, I hope, that asking people to sacrifice, to give up something is not only politically incorrect, but politically terminal.
Still, it's all too easy to simply blame the politicians.
Culturally, we seem to have become an indulgent, entitled society. We want it all and we want it now. Today, for example, we have done LBJ one better. We want guns, butter and tax cuts.
We have also become a myopic society. We seem to live almost entirely in the moment and to have forgotten the future, let alone take responsibility for it. It wasn't always that way in America. The greatest generation faced challenges at least as daunting as ours. They fought and paid for the costliest war in history in every sense of the word costly. Not only did they repay debts far higher than today's, but they paid for the GI bill, the Marshall plan, and a huge infrastructure highway program.
We have done it before and I see no reason we cannot do it again.
The one indispensable first step is to try to educate the American people, and particularly the young, whose future we are imperiling.
At the same time, we must also try to motivate and activate the public to create a movement that becomes a special kind of special interest. A special interest for the general interest-a special interest for the future-a special interest for our children and grandchildren.
Now, we certainly know that this is a very daunting mission, some would say a presumptuous mission, or even a foolhardy one. Why, then, am I doing this with so much of my resources and myself, beyond the simple fact that this is my passion-where my heart is?
Well as George Stigler said, "If you have no alternative, you have no problem." I can't imagine a worse alternative than waking up in 10 years or so and finding this a much diminished America and not having tried to do anything about it.
As daunting as our mission is, it would be impossible without a passionate, fully credible and even charismatic President and CEO of the foundation. As for credibility, I was most impressed by a visit two weeks ago with Washington Congressional leaders. I have never seen such bi-partisan, enthusiastic praise for any individual as I heard about Dave Walker. As for charisma, I recall the occasion of honoring Dave as The Concord Coalition's economic patriot. On the way home, Joan said, "I just met an oxymoron: A charismatic accountant."
Before Dave comes up, I'd like to show you a two minute trailer of a film that we decided to purchase. It is a significant and gratifying coincidence that the producer picked Dave to star in it before he joined the foundation.
Again, my warmest thanks.
