Saving Uncle Sam: Start with honesty

November 23,2009: Last Thursday I had the opportunity to speak to a journalism class at Alaska Pacific University about blogging, politics and public policy. As I walked out of the building, I couldn't help but think of those same idyllic young faces in 20 years, when they're struggling to pay off the profligate spending of this generation.

Their burden will be absolutely staggering.

In Christopher Buckley's deliciously wicked novel "Boomsday", he hilariously envisions the coming battle between Baby Boomers and younger Americans who don't want to be stuck paying the growing bills brought on by negligent spending and mounting Social Security debt.

Buckley's novel that has twenty somethings storming gated retirement communities and rioting on golf courses might just be closer to the truth than we'd like to imagine.   

Already the United States is the world's largest debtor country in dollars.

Even under favorable conditions, the level of U.S. annual current account deficits is projected to climb to $6 trillion by 2030, more than seven times its previous high.

This sum would represent more than 15% of GDP which would be five times what Federal Reserve Chair Ben Bernanke has already said is the maximum to avoid smothering economic growth as a share of GDP. "Unless we demonstrate a strong commitment to fiscal sustainability,” Mr Bernanke said earlier this summer, “we risk having neither financial stability nor durable economic growth.”

If we don't change course quickly, by 2030 the net foreign debt of the United States would exceed $50 trillion, or 140% of GDP. In 2030, the U.S. would be transferring a full seven percent of our entire economic output to foreign governments every year in order to service our debt.

As Edmund Andrews recently pointed out in his New York Times opinion piece, Americans now have to climb out of two deep holes: as debt-loaded consumers, whose personal wealth sank along with housing and stock prices; and as taxpayers, whose government debt has almost doubled in the last two years alone, just as costs tied to benefits for retiring baby boomers are set to explode.

The competing demands could deepen political battles over the size and role of the government, the trade-offs between taxes and spending, the choices between helping older generations versus younger ones, and the bottom-line questions about who should ultimately shoulder the burden, Andrews writes.

So what is the answer to avoid this doomsday scenario? The non-partisan Congressional Budget Office had made it very clear: "putting the nation on a sustainable fiscal course will require some combination of lower spending and higher revenues than the amounts now projected."

I know what you're thinking...great glittering generality about cutting spending and increasing revenue; what the hell does it mean. It means two things; Americans are going to have to get less and pay more.

However the real solutions begins with politicians in this country adding honesty to their to do lists. This in and of itself will undoubtedly be the most difficult public policy to achieve. No politician is going to embark on the campaign trail telling his or her constituents that they'll have to get less and pay more when it's the opposite message that gets people elected and re-elected.

In fact, the public reliance on government is exactly what Alexis de Tocqueville, writer of all things America, warned of back in the 19th century. "The American Republic will endure until the day Congress discovers that it can bribe the public with the public's money" he wrote, and today we are living the dream.

For far too long Americans have been led to believe that John Maynard Keynes was an idiot when he warned about there being no such thing as a free lunch. After all, we live in a state that pays people to live here while providing free government services and in Washington D.C. forty three cents out of every dollar goes towards two entitlement programs; Social Security and Medicare.

Meanwhile instead of simply being honest and telling Americans that if they don't want health care rationing they'll have to cough up more cash to support their government run health care program, it's turned into a debate over socialism.

And if you don't believe me, consider this; those protesting health care reform aren't worried about a government take over of health care, they're worried that they'll have to finally pay for that free lunch they've been snacking on for years.

This past summer during one of those illustrious Tea Parties, where protesters showed up with signs shouting "No Socialism" and "Keep government out of health care" shows just how disingenuous the arguments have become.

First off, government already runs health care if you're over the age of 65 or qualify for low income care including children's health insurance. In fact the federal government is the largest provider of health care coverage in the country.

To argue against a government take over health care is like arguing the Titanic shouldn't leave port. Sorry, that ship sailed a long time ago.

Second, a closer look at protesters around the country like Anchorage's Lucy Bishop, reveals they aren't protesting the expansion of government health care, they are protesting the potential contraction of government health care.

Bishop, who showed up to participate at the protest at one of Senator Mark Begich's speaking engagements this summer said she was worried that government might not pay for her pacemaker.

And why not? After all we live in a country where you can smoke two packs a day and eat fast food three times a day and have someone else pay for your poor choices. Then...go out into the streets and protest the audacity that your free lunch might not be so free anymore.

According to the Center for Disease and Prevention, three-quarters of health care spending now goes to treat “preventable chronic diseases.”

But God help anyone who dare propose taxes on the same foods that are driving health care costs. 

We’re spending $147 billion to treat obesity, $116 billion to treat diabetes, and hundreds of billions more to treat cardiovascular disease and the many types of cancer that have been linked to diet. One recent study estimated that 30 percent of the increase in health care spending over the past 20 years could be attributed to the soaring rate of obesity, a condition that now accounts for nearly a tenth of all spending on health care.

Meanwhile, not one damn politician (Ron Paul excluded) has ever stood up at these tea parties and said, "I agree. Lets get government out of all health care programs and retirement programs while we're at it." I'm sure that would go over real well.

As the debate over health care rages on in Washington D.C. with Senate Democrats voting to advance the health care reform bill to the floor of the senate for a full vote, it again exemplifies the lack of honesty during a critical public policy debate.

On Thursday, Alaska Senator Mark Begich took to the Senate floor to speak in support of the Democratic plan to overhaul the nation's health care system. In his ten minute address he derided the use of props by Republicans who have been carting out a three foot high stack of papers to represent the 2,000 page health care bill.

Begich is right; the use of props and gimmicks needs to stop...but on both sides.

Begich defended the proposal saying it would fix Medicare and give "seniors more." Wait a minute. How do you promise seniors more, when one of the main components of how we pay for the bill is to cut Medicare by $400 million?

The bottom line is while Republicans are using visual gimmicks, the Democrats are using accounting gimmicks to try and convince Americans that expanding health care for 31 million people while fixing Medicare will cost less money.

The current legislation relies on back loading costs and mythical cuts to Medicare (that Congress has postponed every year) to make it appear that the bill will actually lower the deficit.

But the truth is Congress has never even supported the existing prescribed Medicare cuts that were passed as part of a cost containment effort years ago, instead voting every year to avoid the cuts. But somehow now...after adding 31 million people to the rolls of government subsidized health care, lawmakers are going to finally find the courage to make those costs.

Yeah, an additional 31 million people yelling at lawmakers about being denied what they think they're legally entitled to is going to help?

Please Lord, give me the break I so dearly deserve.

And what about those Democratic Senators like Louisiana's Mary Landrieu, who originally claimed to have serious concerns about the bill's cost? She was bought off by adding more federal money for her state's Medicaid program. 

In order to get her vote, Majority Leader Harry Reid added language that would increase the bill's cost by increasing federal Medicaid subsidies for "certain states recovering from a major disaster."

It's no coincidence that Landrieu's home state is the only one that would qualify under that wording. The cost for Landrieu's vote? An additional $300 million.

It's all gimmicks, it's all fuzzy math and it all adds up to why this country is the largest debtor country in the world.

And it reaches far beyond Washington D.C.

Last week former Governor Frank Murkowski re-appeared on the scene to deliver news that many of us have known for years. Declining oil production, rising government costs and a gas pipeline strategy that has wasted valuable time all equal trouble ahead.

But again, more disingenuous chatter.

In 2002 when Murkowski was running for governor he offered up the same free lunch theory to get votes. We were going to reverse the trend of declining oil production, we were going to drill our way out of the shaky fiscal future we faced, and on and on.

It never happened. It never happened because it can't happen.

It's time for honesty. Any politician who wants to stand in front of you and at the same time tell you we're going to provide more government services to more people or more military troops for more battles without rationing services, significantly raising taxes or accumulating more debt is simply lying to you.

It's time to wake up and be honest in order to save the next generation.