Report

America’s Economy – Headed for Crisis: Realistic Approaches Are Essential

Robert Bixby, J. Robert Kerrey, Peter G. Peterson, and Warren B. Rudman

Deficits do matter. Projections show risks to the economy, an extra “debt tax” on every taxpayer, and highlight the weakened ability of the federal government to invest in the future or respond to unforeseen emergencies. Cutting fraud, waste, and abuse, curbing earmarks, raising taxes on the very wealthy, or streamlining the staffing of the federal government is simply not enough to solve the problem.

Recommendations
Comprehensive solutions may take considerable time to develop, and once implemented, should be subject to periodic review. However, as a framework for action the next President should:

  • commit to a balanced budget
  • take every reasonable step to constrain the rising cost of heath care and retirement programs Social Security and, most especially, Medicare
  • make clear to Americans that taxes cannot be cut over the long-term unless programs are cut commensurately, and
  • prevent total spending, taxes, or debt from reaching levels that could reduce economic growth and future standards of living

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