Red Ink

"This is my competition. I chose it because I think we need more of these intelligent, thoughtful, well-documented books that scare the pants off you and convince you that action is needed. Not panicky overreaction – that’s not what David is arguing for – but more, “Let’s change the policies now, figure out a way to bring the debt under control, and let’s do that in a reasonable and responsible manner.” His message should appeal to people across the political spectrum. I wish him luck and will do everything I can to promote his book as a way to help educate everybody who should care about these issues. We agree on a lot of things, but our book is much more about raising revenues than almost anybody else’s. I claim that we are consistent with the views the Eisenhower Republicans had, which are that we have to protect social insurance, including social security, Medicare and Medicaid, and we want to bolster revenues to do that. Other reasonable people are not so focused on revenue, and that’s a good discussion to have. I’m happy to have that discussion in an analytical way, in a historical way, in a non-emotional way, and I think it’s terrific that people like David are advancing alternative visions. What we really need is an educated, well-informed debate. No, no, he’s not that extreme. But he’s less in favour of increasing revenue than we are. So is almost everyone. Why don’t you come down to Washington and talk to people about that? We need to get your voice in the mix! Yes. That’s my view too. But I know you have a European background, and continental Europeans in particular have a different view towards government and towards revenue. I’m actually more on the side of limited government than a lot of my European friends, but I think we should defend and stick up for the basic social insurance programmes we have in the US. I don’t want to see them gutted. I think healthy scepticism is the right attitude towards government, and what you said about financial regulation and its ineffectiveness or failures is exactly right. I’m not expecting government to fix all the problems. I think a better solution to the banks would be to break them up and let the markets sort out who is going to succeed and who is going to fail. That’s a view some people on the left like, and I have plenty of libertarian friends who agree with that also. “I think a better solution to the banks would be to break them up and let the markets sort out who is going to succeed and who is going to fail” The government services that are problematic in the US are often provided by state and local governments and I have plenty of issues that I’m not happy about with my local government. But the federal government doesn’t do that much. As we discuss in the book, the things it does do are pretty high value and, while you can squeeze it a little bit, that’s not the big money. The big money is social insurance and healthcare. Healthcare is the toughest problem of all to deal with, and it’s one where Americans are very divided. To a lot of Europeans this is strange, but it goes back to the issue of a deep distrust of government. I think the interesting question over the next 100 years will be whether this deep distrust of government is going to serve Americans well, as it did previously, or whether it will increasingly become a handicap. I voted with my feet and I became an American, and I’m happy to be an American, but we’ll see where this tradition takes us. The healthcare experience in Europe varies. Costs have been controlled better in some places than others. The only countries that have really been able to hold those costs down – and which look likely to be able to hold them down going forward – are those with single-payer systems with more or less universal coverage. But the Americans don’t want to hear this. It’s not a popular message. Scandinavia. You can look in the back of the IMF Fiscal Monitor , the latest to come out. They have a table, I think it’s table 9a, which gives you projected healthcare costs and the impact on the budget over a 20-30 year period."