In accepting The Concord Coalition’s 2019 Paul E. Tsongas Economic Patriot Award, Mark Weinberger, former Global Chairman and CEO of EY, made a clear, compelling and forceful argument for why our nation’s leaders must recognize the magnitude of our fiscal problems, the need to rise above partisan political barriers in seeking solutions and the importance of economic freedom as the vehicle towards future prosperity.
“America’s fiscal path is completely unsustainable, “ Weinberger said, adding, “As deficits continue to rise, our ability to make investments in our future is going to shrink even further. And, when interest rates return to normal, these payments will skyrocket. Is that really the future that we, as a generation, want to leave to our kids and grandkids?”
Weinberger emphasized that “we can solve this problem – but were going to need leaders with the courage to make some tough choices.” He acknowledged that “today’s policital climate won’t make it easy,” he but stated, “ultimately, this is bigger than politics- it’s about securing our country’s economic future.” He observed, “While our economic future as a nation depends on policymakers making more responsible fiscal decisions, it also depends on capitalism and the incredible power of the free market.”
In closing Weinberger reminded the audience, “The work we do is about more than just balancing the budget. It’s about building an economy that allows freedom to flourish. An economy that produces market-based solutions to society’s greatest challenges. An economy that creates more opportunity for all Americans to thrive, now and in the future.”
Concord Coalition Economic Patriot Award Acceptance Remarks
Mark Weinberger October 3, 2019
Thank you, Senator Kerrey and good evening.
It’s an honor to accept The Concord Coalition’s Economic Patriot Award tonight. I’m especially humbled to be recognized as an economic “patriot” in a room that is full of them. Patriots like Senator Kerrey and Maya McGuiness. And, of course, Bob Bixby and the incredible staff of The Concord Coalition—who carry forward the torch even when it seems like a lonely task.
It’s hard to believe the Kerrey-Danforth commission started ringing the bell on this topic over 25 years ago. The commission showed the nation how critical it is to get our federal budget in order. And it still shapes the debate on these issues today.
Senator Danforth – who, by the way, gave me my first job in Washington – has been an inspiration in so many ways.
Tonight, I have 5 to 7 minutes, so I want to make three quick points about the work we do and why it’s important.
One has to do with the challenge we face.
One has to do with finding the solution.
The third issue is much broader than fiscal austerity and goes to the economic freedom that we have been blessed to enjoy during our lifetimes. It is about the much-maligned concept of capitalism—and the essential role business, and free markets, play in creating widespread prosperity.
First, we all recognize that America’s fiscal path is completely unsustainable.
I know I’m preaching to the choir—but it’s important that we keep saying it out loud because, unfortunately, many of our fellow Americans are still not paying attention. And if you listen to the presidential election, you would think that we have an endless amount of money to spend on any cause, and don’t really need to pay for it.
We have a total national debt already over $22 trillion dollars. Government debt as a share of our economy is approaching its highest level since World War II. In August, the CBO projected that federal deficits—the annual additions to the debt— will exceed $12.2 trillion between 2020 and 2029. Chances are that this estimate is too conservative.
These numbers are too big for most Americans to understand. So, I like to focus more on the consequences of this huge debt burden we are leaving for our kids.
In a nutshell, our spending today has taken away our ability to invest in our future.
We are selfish and stealing money from our children to pay for ourselves. Today, 70 cents of every dollar the federal government collects is automatically spent on entitlements and interest on the debt. It has become an ATM machine. That leaves just 30 cents to invest in our future. Fifteen cents goes to defense. That leaves 15 cents for national priorities like research and education, infrastructure – investments in the future.
And, we already spend more than 6 dollars for elderly person per 1 dollar for children. This is a conscious choice to underinvest.
As deficits continue to rise, our ability to make investments in our future is going to shrink even further. And, when interest rates return to normal, these payments will skyrocket.
Is that really the future that we, as a generation, want to leave to our kids and grandkids?
In short, we have created a ticking time bomb. We don’t know exactly when it’ll go off, but the fuse is getting shorter and shorter. And once the bomb explodes, it will be nearly impossible for the government to meet even its most basic obligations to the American people.
My second point is that we can solve this problem—but we’re going to need leaders with the courage to make some tough choices. To be clear, this is not a math or policy problem. This is a political problem.
In 1994, the Kerrey-Danforth Commission put options on the table for slowing the growth of Social Security and Medicare. We didn’t endorse them – we just put them out there to help people understand the challenges, and the tradeoffs.
Soon after, I got hundreds of thousands of postcards from members of the AARP. They were furious that we had even suggested certain ideas—that by the way only affected future retirees and only slowed the growth of these programs, not cut them. It got so bad at one point that my own mother wouldn’t return my phone calls!
So, we recognized on the commission just how tough these political choices are.
We also knew that we couldn’t solve the problem with spending cuts alone. That’s still the case today. On both the spending side and the revenue side, we are going to have to make some hard decisions. No one is going to be completely happy. We will need to slow our spending, which is predicted to explode to nearly 28% of GDP (it is 22% today) and increase our taxes, which have been around 18% of GDP over time.
This gap is unsustainable. No one can continually spend increasingly more than they earn. The rest of the world will not put up with this forever.
Because these decisions are politically hard, they must be made in a bipartisan manner.
Needless to say, today’s political climate won’t make it easy. There aren’t many moderates left in either party. It’s only getting harder to work across the aisle in the way that Senator Kerrey and Senator Danforth did. But we have to keep pushing our leaders to work together and rise above politics as usual. Because, ultimately, this is bigger than politics—it’s about securing our country’s economic future.
That brings me to the third and final point: while our economic future as a nation depends on policymakers making more responsible fiscal decisions, it also depends on capitalism and the incredible power of the free market. The very concept that has made us the most prosperous nation in the world. The free-est nation in the world. The envy of the world.
We live in a time of deep skepticism about the role of capitalism and business in our society. In this country and others, many people are questioning whether capitalism is suited to the unique challenges of the 21st century.
I must tell you, I believe the answer is emphatically yes. Free and open markets, and the role business plays in them, have created – and continue to create – incredible opportunities for people around the world. They have driven progress throughout our history—from the Industrial Revolution to the digital revolution— and they remain the best tool we have for driving progress in the future.
By the way, business also play a hugely important role in addressing the biggest issues in income inequality—and the issues that will be necessary for Americans to have a healthy, productive, and secure future. The majority of Americans and the vast majority of workers get their health care through their employers. Businesses provide the majority of actively managed retirement vehicles. And businesses provide virtually all reskilling and upskilling for workers.
We can’t be lulled into the narrative that because things aren’t working for everyone today, that business is bad and we need the government to take over it all.
It is easy for us to forget that economic liberty is not the natural state that exists around the world. Capitalism has created more wealth, lifted more people out of poverty, created more innovations and social mobility than any other system in the world. That’s why people want to come here. That’s why people want to copy our innovation and successes.
Yes, we have challenges. The degree of income inequality is unacceptable. We need to acknowledge it and deal with it. It’s a moral and economic imperative. But, we must not politicize it, or pander. It takes political leadership.
The enviable economic and social progress we have achieved over our history is rooted in economic freedom. Freedom to make choices. Freedom to compete. Freedom to try new things and take big risks.
So, to come full circle. Our fiscal challenges pose a threat to that freedom. If we are handcuffed to past commitments and lose the ability to do what past generations have done for us, invested in us, we will be depriving our children of that freedom. That is the true cost of our exploding debt.
It’s up to us to protect it.
As we renew our commitment to The Concord Coalition’s mission here tonight, let’s not lose sight of the bigger picture. The work we do is about more than just balancing the budget. It’s about building an economy that allows freedom to flourish. An economy that produces market-based solutions to society’s greatest challenges. An economy that creates more opportunity for all Americans to thrive, now and in the future.
We have a tough battle ahead of us. But, like the patriots who inspired this organization’s name, I believe that we can prevail.
Thank you again for this great honor.