I.O.U.S.A - Addison Wiggin [11]
• By 2012, the federal government will stop doing 1 in 10
things it ’ s doing now.
• By 2020, the federal government will stop doing 1 in 4.
• By 2030, the federal government will stop performing half of the services it provides.
• By 2050, Social Security, Medicare, and Medicaid will consume nearly the entire federal budget.
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The Mission 13
• By 2082, Medicare spending alone will consume nearly the entire federal budget.
At the current rate, it ’ s inevitable: Most Americans are going to have to rethink what they expect from their government. Do politicians need to be held accountable for the promises they make during election campaigns? Seems like a natural. But individuals need to take responsibility for their own fi nancial future, too. Planning better, saving, and investing wisely in private life will make it easier for policy makers to make diffi cult decisions regarding the fi nances of the government.
■ ■ ■
We have set this book up in a different fashion than Empire of Debt or Demise of the Dollar. The fi rst part, “ The Mission, ” can be read almost as if it ’ s a play — a tragicomedy of sorts. It ’ s a primer if you ’ re seeking a basic understanding of the nation ’ s biggest economic challenges, both public and private.
If you ’ d like to dig a little deeper, we ’ ve printed the full transcripts of all the interviews we conducted in the second part, “ The Interviews. ” There is no shortage of ideas, fi ery discussion, and infl ammatory statements. Some readers will want this book to be an attack on one party at the behest of the other. Still others will want us to throw Molotov cock-tails at the Establishment and suggest the United States government is a failure and deserves what it has coming. In this book, as in the fi lm, we do neither. We reserve those activities for other more appropriate locales.
Together, the book and fi lm do provide a unique slice of contemporary economic history in the United States early in the twenty - fi rst century. With any luck, we ’ ll make fi scal responsibility hip in Washington again and inject the themes of the book and the fi lm into the national conversation well before and long after the 2008 election.
Or maybe we should just wait for the next bubble.
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C h a p t e r 1
THE REAL STATE OF
THE UNION
I would argue that the most serious threat to the United States is not someone hiding in a cave in Pakistan or Afghanistan, but our own fi scal irresponsibility.
—David Walker, former comptroller
general of the United States
On January 28, 2008, the forty - third president of the United States, George W. Bush, gave the fi nal State of the Union address of his presidency. During the speech, he was interrupted 72 times by applause. Curiously, the president only broached the nation ’ s defi cit once, briefl y, and then only to reassert the administration ’ s pie - in - the - sky projection that it will be reduced to zero by 2012.
The president asserted his administration ’ s premise that tax cuts would spur economic growth and that growth would, in turn, help the nation “ grow ” its way out of debt. Yet, even by Congress ’ s own measures, as of late January 2008, the 15
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16 The
Mission
yearly defi cit for that year was already on track to increase by $219 billion. It in fact ended the year at $482 billion more than twice the projection. Those fi gures don ’ t include off -
budget spending for the wars in Afghanistan and Iraq. Nor do they include the so - called economic stimulus checks the president and Congress passed out to American consumers in the spring. The economy in the meantime had been teetering towards recession — no “ growth ” at all — for nearly two years.
During the speech, the President used the word debt once, despite the fact that the national I.O.U. had already