Thursday, January 24, 2013

A Night with Erskine Bowles

DB~ and I spent a frigid January night last night at Heinz Hall, attending a lecture given by economist and political animal, Erskine Bowles.  Going into the lecture, we both thought it was going to be a dry lecture on economics from some dour guy.  Quite the contrary.  Bowles turned out to be quite affable, with his North Carolina drawl, folksy humor, and ability to take broad concepts (like how to cut $4 TRILLION from the national debt) and make them accessible for the whole audience.

The focus of the lecture was the Simpson-Bowles plan to cut the aforementioned $4T from the U.S. National Debt by 2020.  The study was approved by the 18 member board by a majority, but it was ultimately rejected by President Obama in December 2010.  The plan has 5 facets to save the money:

1.  Defense -- Bowles said something that I have felt for quite a while.  "The United States can no longer afford to be the world's policeman."  The wars in Iraq and Afghanistan, to say nothing of our involvement in other conflicts, have taken too great a toll on that nation's finances.  The United States spends more on defense than the next 17 countries combined.

2.  Health Care -- The premiums in the country, big pharmaceutical companies, and name brand drugs are ruining the health care system.

3.  Interest on the debt -- Right now, with the ultra low interest rates, the U.S. pays around $240 billion of interest on our debt.  Once rates go up in the near future, coupled with the increasing debt itself, the U.S. is projected to spend $1 trillion just on interest.

4.  Social Security -- This is a big money item, consuming nearly $1 trillion itself.  Bowles proposed raising the retirement age by 1 year, then to age 68 nearly 30 years from now.  He said this resulted in getting death threats.

5.  Tax Code -- "If I asked the economics depart at UNC to make a more complicated tax code, they couldn't make it worse than the current one."  Bowles contends that by eliminating loopholes and spending associated with the tax code, $1 trillion could be saved.  Tax rates would drop and businesses would be taxed more uniformly.

Bowles was quite entertaining in the Q&A session, too.  His wife's name is Crandall and his is Erskine, "which explains why our children are named Sam, Annie, and Bill."  As chief of staff for Clinton for 2 years, he also had some insights on the gregarious ex-President.  He spends his time now, after retiring as President of UNC in 2011, running the organization Fix the Debt.  His ideas are patriotic, grounded, and sensible.  He deserves another bite at the apple and we need to listen to reasonable people to fix this mess we are in.

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