(HT: Greg Mankiw, as usual).
Someone has set up a new Ross Perot website where he's warning us of fiscal dangers. I would recommend clicking this link to go to the slide presentation, powerpoint charts with some commentary. Note: I didn't listen to the presentation, only read the slide commentary. I would start at slide 9 as the first 8 are sort of disingenuous because they don't measure things in terms of GDP.
You can interpret slides 9-11 differently than Perot. He is looking at the overall average of government spending as a % of taxes and taxes as a % of GDP. But, the trend is clearly downward and so a moving average would be more honest.
But, slides 12-35 are great and illustrate the huge problem that is coming at us headlong. Non-discretionary government spending is getting ready to balloon as baby-boomers retire and the economy isn't likely to grow fast enough to keep up.
Perot's solution? Well, there really isn't one, and that's the refreshingly honest truth. He suggests a comination of 4 painful options:
1. Restructuring entitlement programs (politically deadly for whichever candidate says it first).
2. Raise payroll and income taxes (also politically deadly, though Obama favors a payroll tax increase for the highest income-earners).
3. Borrow more money each year to make up the shortfall (this is a bad option that no one is recommending..it's partly how we've gotten into this mess to begin with).
4. Cut discretionary spending even further. (Politically deadly).
#4 is politically deadly because every candidate gets lambasted for not giving enough funding to autism research, global warming research, rebuilding New Orleans, building more schools, taking care of our troops medical needs, improving your local tourist attractions and fill in the blank with whatever you wish you could ask the government to give you.
What America needs most are the very things that the opposing parties will use against whatever elected official gets it done in 10-second soundbytes trying to get that official ousted from office. That's what makes me very angry.
A combination of 1,2, & 4 need to happen VERY soon. Who are you going to trust to give America the straight talk about it? I'm trusting John McCain to do it, and I hope he doesn't disappoint.
Either way, my parents' generation has really ruined things for my son's generation. By 2030, I hope my family is living in Estonia.