His urgent message about the deficit is reaching its audience
By ROBERT TRIGAUX
Published September 13, 2004
You never know what can end up on the New York Times bestseller list of nonfiction.
But a book about fiscal responsibility and the federal deficit?
No joke. Look under Unfit for Command, the No. 1 nonfiction bestseller that bashes John Kerry's conduct in Vietnam. Go past No. 2 American Soldier by Tommy Franks and No. 3 My Life by Bill Clinton. A little lower than Jenna Jameson's How To Make Love Like A Porn Star at No. 6.
There it is. Running on Empty, by Peter G. Peterson, ranked No. 20 last week. The book, Peterson's fifth addressing long-term fiscal challenges, was published in July.
"I'm shocked," Peterson admitted in a recent interview. "I'm not used to writing bestsellers."
For the record, the complete title of Peterson's book is Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It (Farrar Straus Giroux, $24). Consider it an equal-opportunity basher of any and all U.S. leaders who choose to ignore one of the country's great looming financial and demographic nightmares.
What haunts Peterson is a frightful mix: a growing national debt, the rapidly aging U.S. population, and the already out-of-control payments to the elderly via Social Security and Medicare programs.
The combination means we're heading for a runaway debt that, left unaddressed, will dump an enormous bill on the next generation or two. Or three. That "bankrupting our future," to quote the book's title, is immoral, Peterson argues.
Has the country's checking account ever gone from black to red so quickly? When President Bush took office, the federal government basked in a 10-year projected surplus of $5.6-trillion. Now we're looking at an estimated debt approaching $7.4-trillion, if all of Bush's current tax cuts are made permanent. That means deficits averaging $740-billion a year.
Let's be crystal clear. This book likely never would have seen the light of day - and absolutely never reached bestseller status - if Bush had not taken office in 2001 with a surplus in the federal budget and then plunged the nation rapidly back into the red.
How? With three big tax cuts, the bursting of the stock market bubble, the impact from the 9/11 attacks, and (most of all) the war in Iraq. The war's cost alone comes to about $7.4-million per hour, $122,820 per minute.
All this presidential campaign talk of economic recovery galls Peterson, who at age 78 sees much of today's so-called uptick based on money borrowed from future Americans.
Now, he believes, more Americans are starting to catch on to the shell game. Vice President Dick Cheney's stance that "deficits don't matter" is nonsense to Peterson.
The Bush administration wants to cut taxes, yet still spend at unsustainable levels. Peterson calls them "big government Republicans" who daydream that the U.S. economy can simply grow big enough to replenish any and all deficits ahead.
Even fiscal conservatives, traditional Bush allies, are starting to snipe. Stephen Moore of the Club for Growth, a group that raises money for conservative political candidates, last week called Bush's fiscal record "abysmal."
Peterson also criticizes Democratic contender John Kerry for promoting major new government programs while failing to explain how they will be funded.
Yet Bush and Kerry both claim they will cut the federal budget deficit in half over the next five years.
That might happen - if they hire Enron's accountants.
Peterson is a self-described "fat cat," but he is no partisan whiner. He's a lifelong Republican, and served as secretary of commerce under President Richard Nixon. He is currently chairman of the Blackstone Group, a New York investment company, and chairman of the Council on Foreign Relations.
He is also founding president of the Concord Coalition, a nonpartisan group that since 1992 has preached the virtues of fiscal responsibility.
And to clear up any name confusion, this Pete Peterson is not former Florida Congressman Pete Peterson, the first U.S. Ambassador to Vietnam.
I caught up with Peterson by telephone to talk about a book that, just by topic, should have bored America's short-term thinkers. Instead, the book has achieved an unusual buzz in this year of presidential politics. Here are some excerpts from the interview:
Q: You've written other books about long-term financial worries that everybody seems to have ignored. Why is Running on Empty different?
Peterson: I think people in their homes know we are kind of living in a fiscal Disneyland. We're fighting two wars. I am old enough to remember the second World War, and then there was a real sense of sacrifice. Now we almost behave as if making tax cuts permanent is our patriotic duty. In their gut, people understand that something here does not compute. There is a sense of anxiety that this free lunch cannot last.
Q: Why isn't there more straight talk from the presidential candidates on this issue?
Peterson: The political system has engaged in amnesia and anesthesia and just keeps kidding the American people.
Q: Why not just leave this deficit problem for a future president?
Peterson: This will start to hit on the next president's watch. The first Baby Boomers will start to retire in five years. There must be some political leadership.
Q: Why are you still making noise over this at your age?
Peterson: I have five kids and nine grandchildren. I am uneasy about what we are passing on to them.
* * *
In March, Federal Reserve Board Chairman Alan Greenspan publicly hinted that the cost of paying for the retirement of Baby Boomers was so large that some benefits might have to be cut. His remarks were roundly criticized.
But Peterson praises Greenspan and urges the creation of a bipartisan deficit commission akin to the 9/11 Commission. It's just the start of cost-cutting reforms - including a halt to more tax cuts and convincing consumers to spend less and save more - that the author argues political leaders must eventually endorse.
Good luck, Pete.
In the 1980s, when federal deficits in the Reagan-Bush administrations soared to record heights, a National Debt Clock was hung on the side of a midtown Manhattan building. The clock went dark four years ago this month because the national debt was actually falling.
It was plugged back in on July 2002 when the debt again began to rise. And earlier this year, it was replaced with a fancy, billboard-sized digital clock that showed a national debt exceeding $7-trillion.
The debt rose so quickly that the last seven numbers of the new clock moved too quickly to be read by those walking by. Peterson wants folks to stop and at least take a second look.
