One of us is a conservative, retired financial adviser, the other a liberal attorney. Were related by marriage and frequently engage in good-natured political debates that rarely end in agreement.
By VAN WOLBACH and GREGG LOMBARDI
Special to The Star
Recently, however, we have found one subject upon which we can agree: The national debt is out of control and not taking action to fix the problem will almost certainly lead to many problems in the future. Continued spiraling growth in our national debt is likely to lead to inflation, increasingly more severe financial crises, growing unemployment, more foreign control over our debt and a generally bleak future for our children.
As the bipartisan Simpson-Bowles Commission on Fiscal Responsibility and Reform found: Every modest sacrifice we refuse to make today only forces far greater sacrifices of hope and opportunity upon the next generation.
The numbers surrounding the debt crisis are stark. In 2001, our national debt was a staggering 33 percent of our national gross domestic product. In other words, for four months, we would have to give every car, airplane and apple pie produced in America the total value of all goods and services created in the American economy to the people, countries and others that hold our debt before it would be paid off. Obviously that would bankrupt most individuals and businesses. As high as the 2001 debt was, by 2010, the debt had almost doubled to 62 percent of GDP, and its only become worse in the last two years.
At the same time, some numbers are encouraging. The total aggregate taxes collected by the federal government each year are now 15 percent of GDP which is the lowest it has been for more than 60 years. So, we have some room for revenue enhancements to accompany needed spending reductions.
The commission, after eight months of deliberation, developed a series of commonsense proposals to reduce government expenses and increase income. They range from raising the Social Security retirement age to 69 by 2075 to reducing tax subsidies for many already profitable businesses and eliminating hundreds of dubious credits in the tax code.
Surprisingly, the commission recommendations are not all painful. They actually are proposing reducing individual income taxes for most wage earners and using billions of dollars of the other savings they are proposing to invest in government activity that will make our businesses more competitive.
The plan would also stabilize Social Security for the next 75 years, assuring that our childrens children will have a modestly comfortable retirement. The proposal will also attempt to keep interest rates low, making it easier for businesses to expand and create jobs.
So, the two of us have a simple suggestion: Lets have Congress adopt all of the Simpson-Bowles Commissions proposals, even though there are things in the proposal for all of us to dislike.
Special interest groups, of course, will fight tooth and nail to stop some of the changes, but it is the right thing to do and will make the country stronger for generations to come. Indeed, as the Chairman of the Joint Chiefs of Staff has said, The most significant threat to our national security is our debt.
Anyone who is interested in finding out more about the proposal should read it at FiscalCommission.gov (click onThe Moment of Truth under Latest News). And join the fight for budget changes that even die-hard conservatives and card-carrying liberals can agree upon.
Gregg Lombardi is the executive director of a local nonprofit law firm and a member of the Missouri Bar board of governors. Van Wolbach is a retired senior vice president from UBS Financial. He previously was the president of Brookside Savings Bank.