Customer Reviews

Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do About It

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Edit of 16 Apr 08 to add more links on the bad and the good.

Edit of 17 Jan 07 to add links.

This extraordinary book should be read in tandem with Lewis H. Lapham's Gag Rule: On the Suppression of Dissent and the Stifling of Democracy and perhaps also William Greider's The Battle for the Soul of Capitalism as well as Jonathan Schell's The Unconquerable World.

I find it extraordinary to have the Chairman of the Council on Foreign Relations, which I have always considered to be an old man's club of established elites, largely out of touch with 80% of the real world (that is to say, the 80% that has almost nothing in the way of wealth, health, or rights), step up to the plate and speak truth.

This book addresses the second core issue in America's future, i.e. the twin deficits that are not only going to kill the business of America, but also deprive the children of America of their future. (Lapham addresses the first: restoration of honest democracy). In combination, the $7 trillion deficit in federal spending, and the $500 billion a year trade deficit, with roughly $2 billion in foreign loans being required every single day to keep America afloat, both suggest that we are snorting political cocaine and every one of us is a damn fool for allowing two political parties to get away with selling us down the river.

As the author points out in the Preface, when the International Monetary Fund (IMF) cautions its own master, the USA, that it is in danger of becoming an insolvent Third World country, running up bills that "would require an immediate and permanent 60 percent hike in the federal income tax, or a 50 percent cut in Social Security and Medicare benefits," we cannot say we have not been warned.

The author is balanced, focused, deliberative, and earnest. He carefully explains how both the "mainstream" political parties have completely abdicated all responsibility, and completely betrayed the public interest in their eagerness to sell legislation to the highest corporate bidders.

There is one grievous flaw in the book. In concluding that we can only survive by educating ourselves and then finding our voice, the author neglects to address the fast means of achieving short-term fiscal recovery in tandem with campaign finance and electoral reform: the elimination of subsidies, tax fraud, and tax relief for corporations. We have close to a trillion in unwarranted and unsound subsidies to poor agricultural, fisheries, forestry, and minerals programs where every dollar in subsidy is yielding high long-term costs to the taxpayer citizen; we have over $50 billion a year in documented import-export tax fraud ($25 rocket engines going out, $3000 toothbrushes coming in--advanced money laundering and tax avoidance); finally, the corporate share of federal tax revenue has dropped from 32% to 6% in the past twenty years, with corporations like Halliburton paying $15M in taxes on billions in profit--easy to fix: pay taxes on the profit declared to the stockholders.

This is a serious and important book, and it also helps explain why the election of 2004 does not really offer America any choices. Both candidates are from Yale's Skull and Bones, and neither of them is likely to confront the Wall Street elite and betray their secret society. As the author points out, both Democrats and Republicans have betrayed the people of America--the individual voter-constituents, and absent a popular revolt that demands a coalition government committed to electoral and campaign finance reform, I see nothing but trouble ahead as the America Republic continues to fail, and the American charade grows in its dangerous totalitarian and elitist manifestation.

See also on the bad:
Vice: Dick Cheney and the Hijacking of the American Presidency
The Broken Branch: How Congress Is Failing America and How to Get It Back on Track (Institutions of American Democracy)
Breach of Trust: How Washington Turns Outsiders Into Insiders

See also on the good:
Society's Breakthrough!: Releasing Essential Wisdom and Virtue in All the People
A Power Governments Cannot Suppress
Collective Intelligence: Creating a Prosperous World at Peace

Over the last several years, former Secretary Of Commerce Pete Petersen has become something of a cottage industry in and of himself, writing several books, appearing as a pundit on talk shows, and acting as chairperson for both the Blackstone Group and the prestigious Council for Foreign Relations (CFR). Here he continues the caustic warnings he first articulated in "Gray Dawn", a polemic ranting against the potentially devastating consequences of the graying of the American population and the stress this demographic factor would have on growing federal deficits, the aging population itself, and on the national debt. He amplifies those warnings by making a rather alarming set of observations as to the consequences of the reckless and foolhardy policies of the current federal government, policies that combine the worst elements of supply side `voodoo economics' with continued growth in federal entitlement programs.

The mix, Mr. Petersen argues, may become a disastrous witch's brew with catastrophic results both for the domestic economy and the continued well-being of the American people. He saves his most strident criticism for the style of morally questionable leadership currently in vogue, a reckless world view that seems to shamelessly trade immediate and permanent tax cuts for the very wealthy for a mounting tidal wave of debt for our children and their heirs. In detailing his grievances with current policies, Petersen cites a series of common partisan myths, including the notion that the majority of the elderly are poor, that more elderly than children are poor, that Americans are over-taxed, that providing tax cuts for the rich can successfully shrink government, and that imposing so-called "means-testing" for federal benefits will be catastrophic for the needy.

The author places the majority of the blame for our current set of problems upon the shoulders of a variety of forces within contemporary society, from interest groups and their lobbies to an almost pathological concern with short-term results, to the cult of individualism we all seem to suffer from, and, of course, to generational change. He views a number of strategies as potentially helpful in abating the negative set of circumstances we are ensconced in; indexing social security benefits to prices rather than wages, extending health care to all using the plan offered to federal employees as a model, and forcing Congress to include unfunded retirement obligations in the balance sheet (thus ending the thirty five year old sham of never mentioning to the American people the reason we have such a serious shortfall in social security funds in the out-years is because the federal government has consistently and quite deliberately violated the provisions of the Social Security law by spending the extra funds collected every year rather than investing them in accordance with federal law and allowing the investment income to grow). This is an interesting and thought-provoking read, and one that is sure to be the topic of continuing debate. Enjoy

UPDATED 15 Dec 07Broken Government: How Republican Rule Destroyed the Legislative, Executive, and Judicial Branches

This extraordinary book should be read in tandem with Lewis H. Lapham's Gag Rule: On the Suppression of Dissent and the Stifling of Democracy and perhaps also William Greider's The Soul of Capitalism: Opening Paths to a Moral Economy as well as Jonathan Schell's The Unconquerable World.

I find it extraordinary to have the Chairman of the Council on Foreign Relations, which I have always considered to be an old man's club of established elites, largely out of touch with 80% of the real world (that is to say, the 80% that has almost nothing in the way of wealth, health, or rights), step up to the plate and speak truth.

This book addresses the second core issue in America's future, i.e. the twin deficits that are not only going to kill the business of America, but also deprive the children of America of their future. (Lapham addresses the first: restoration of honest democracy). In combination, the $7 trillion deficit in federal spending, and the $500 billion a year trade deficit, with roughly $2 billion in foreign loans being required every single day to keep America afloat, both suggest that we are snorting political cocaine and every one of us is a damn fool for allowing two political parties to get away with selling us down the river.

As the author points out in the Preface, when the International Monetary Fund (IMF) cautions its own master, the USA, that it is in danger of becoming an insolvent Third World country, running up bills that "would require an immediate and permanent 60 percent hike in the federal income tax, or a 50 percent cut in Social Security and Medicare benefits," we cannot say we have not been warned.

The author is balanced, focused, deliberative, and earnest. He carefully explains how both the "mainstream" political parties have completely abdicated all responsibility, and completely betrayed the public interest in their eagerness to sell legislation to the highest corporate bidders.

There is one grievous flaw in the book. In concluding that we can only survive by educating ourselves and then finding our voice, the author neglects to address the fast means of achieving short-term fiscal recovery in tandem with campaign finance and electoral reform: the elimination of subsidies, tax fraud, and tax relief for corporations. We have close to a trillion in unwarranted and unsound subsidies to poor agricultural, fisheries, forestry, and minerals programs where every dollar in subsidy is yielding high long-term costs to the taxpayer citizen; we have over $50 billion a year in documented import-export tax fraud ($25 rocket engines going out, $3000 toothbrushes coming in--advanced money laundering and tax avoidance); finally, the corporate share of federal tax revenue has dropped from 32% to 6% in the past twenty years, with corporations like Halliburton paying $15M in taxes on billions in profit--easy to fix: pay taxes on the profit declared to the stockholders.

See also the more recently published book by John Bogle, Wall Street mutual funds giant, The Battle for the Soul of Capitalism, in which he singled the author of this book out for special praise. What this means is that Wall Street and the "elite" now realize, as Dean Garten from Yale tried to tell them in The Politics of Fortune: A New Agenda For Business Leaders, we are all in this together, government is hosed, labor is vital, morality and integrity are non-negotiable foundations for mutual prosperity. 2008 could be the foundation year of the 2nd American Republic.

See also (with reviews):
Vice: Dick Cheney and the Hijacking of the American Presidency
The One Percent Doctrine: Deep Inside America's Pursuit of Its Enemies Since 9/11
State of War: The Secret History of the CIA and the Bush Administration
A Pretext for War: 9/11, Iraq, and the Abuse of America's Intelligence Agencies
Weapons of Mass Deception: The Uses of Propaganda in Bush's War on Iraq
The Broken Branch: How Congress Is Failing America and How to Get It Back on Track (Institutions of American Democracy)
Breach of Trust: How Washington Turns Outsiders Into Insiders

Pete Peterson did an excellent job describing the symptoms and long term prognosis, and this is a must read for those concerned about how much our children will spend on the enormous debt we are passing to them.

But the author stopped short of discussing the disease (our moneyed political system) and the cure (full public financing of campaigns). Government spending decisions are usually made for one reason alone: congressmen are paid to spend money! Not by you and me but by the special interests who fund their elections and want financial favors.

As an insider I expect that Petersen could have given us the gruesome facts, and I would suggest he do in a sequel.

No matter what your social or economic concern, just follow the money: the common denominator is always the dollar bill. In most cases, the side who contributes the most wins. Our congressmen might just as well put their votes on eBay, it is that blatant.

Peterson's strongest recommendation was to fix the gerrymandering of congressional redistricting. That didn't do it for me. If congress is going to make decisions that are in the best interest of their funders, let it be the taxpayers. For $10 per taxpayer per year we could fund our federal election system, and another $5 would fund state elections as is done in Arizona and three other states. Their system is voluntary and thus constitutional.

If I'm going to pay for the elections anyway (through the back door in increased government spending) I'd rather pay for them up front. It's simple: I don't want my representatives bought by anybody, not even the interests I support.

This book should be required reading for everyone in the House of Representatives or Senate, not to mention the Executive branch.

If I had enough money, rather than make yet another donation to a political party, I'd buy the book and mail it to every congressman/woman and senator with a note to read it if they care for this country's future.

Pete Peterson makes a compelling argument that we're heading for a SEVERE financial and social crises if we continue with business as usual politics in Washington. No matter what your political persuasion is, if this book doesn't make you worry then you're living in denial, or just don't care about the legacy the coming generations will be left to face.

This book takes you beyond the partisan rhetoric and gets at the heart of the current fiscal time bomb ticking away in the U.S. economy. Although simplified to reach a larger audience, the book correctly takes to task both the Republican and Democratic parties for ignoring the real problems and practicing politics while mortgaging our futures.

The book correctly attacks Democrats for building an entitlement society, which is unsustainable. Medicare, Medicaid and Social Security are broken. He states that Democrats have never found an entitlement program that they do not like. It might not be so bad, if the programs truly focused on those who needed them, but every new spending program usually includes those that do not really need the help, as a bribe to get them to favor it.

Peterson also takes the Republicans to task for blindly passing tax cuts, which we cannot afford. He correctly points out that supply side economics - Reagan's trickle down theory - does not and never has worked. The requirement for Republicans to sign a statement that they will not raise taxes is fiscally unsound. Although paying lip service to cutting spending, taxes are cut, even as spending increases. If the Republicans cannot get the social spending cuts they think are needed from the Democrats, then they should not cut taxes.

The book also points out that the private account recommendation from the President's commission on social security reform is worthless, since it is just moving borrowing from one account to the other. Private accounts may make sense, but only if it is a required additional contribution. It is not a tax, though some may call it that. Peterson does agree with the President's commission's recommendation to index social security benefits to prices rather than wages. This brings the system into balance without the private accounts!

Peterson also proposes solutions. Although some of them are pie-in-the-sky, and will probably require a crisis to pass (end partisan politics, being one), he at least provides some real talking points. Most of the changes are focused on healthcare and social security, which is where most of the problems exist. He also warns that the temporary tax cuts passed in the last few years need to remain that way. Other ideas, which will be harder to swallow, include scaling back the mortgage interest deduction and taxing corporate paid health plans. He does not put this in his solution section, but these are noted elsewhere in his book and are clearing in his thinking.

Whether you agree with Peterson's plans or not, this book is something we all need to read and understand. Other reviewers suggest that Congress should read it. They don't have to. They know it and have ignored it. Americans must now learn this and require their representatives, Democrat or Republican, to face the truth.

An outstanding book on the lack of political courage on both sides of the aisle and the resulting fiscal train wreck it will soon lead to. However, the American people also bear much of the blame since we as a people have become increasingly reluctant to trade in instant gratification for future rewards and keep electing politicians that don't want to implement tough but necessary policy changes. The author suggested several solutions to the problem. However, I'm pessimistic those have a realistic chance of being put in place. I think the most likely outcome of the impending crisis is that the Treasury will simply print more money so politicians can avoid raising taxes or reducing spending. This outcome will be the least painful in the short term. However, in the long term it will have the most adverse consequences as inflation will be kept at a high level and it does not address the fundamental issue of fiscal responsibility.

This is an excellent and easy book to read. It's main theme is that both Democrat and Republican Administrations are equally fiscally irresponsible. Even the rare Budget Surpluses generated during the Clinton Administration were really a mirage. If the Government had to report its fiscal condition just as publicly held companies report their financial condition to the SEC, the Government would be deemed insolvent. This is not so much due to the yearly Budget Deficits, but much more so due to the negative net present value of the net cost of the Social Security and Medicare programs (social security taxes minus Social Security and Medicare claims). This huge cost is due to the demographic forces of an aging society. As a metaphor, this is as if IBM's pension plan was so underfunded that it's negative present value that IBM had to report on its balance sheet would cause IBM's net worth to be negative. This is not what you see with Government stealthy accounting. But, that is what the true fiscal condition of the Government looks like.

Among Peterson's solutions, he proposes a severe restructuring of Social Security and Medicare programs. It entails painful decisions. But, it is inevitable. The Government behind close doors is currently talking about such restructuring. One of the main issues is what is the age cut-off for the grandfathering of existing benefits. Government leaks suggest the age cut-off considered is between 50 and 55. This means that if you are of this age or older, the Government will not touch your benefit. But, if you are younger they will be curtailed.

I have read interesting rebuttals to this overall fiscal storm argument. Many experts view that Peterson over dramatizes the situation. One argument suggests that higher labor productivity will decrease the impact somewhat. This is true, but it is very relative. Meaning higher productivity may help, but not nearly as much as to avoid the perfect fiscal storm. The other rebuttal suggests that the problem is not so much an aging population but a U.S. health care system with out of control cost. Our health care system may engulf both the Government and the private sector's financial condition. I think this is an excellent argument. But, it does nothing to truly exclude the other. In other words, we still do have a fiscal storm associated with an aging population. And, we also do have a healthcare system that is putting increasing pressure on both the public and private sector resources. In summary, none of these arguments truly affect the importance of Peterson's message.

In view of the above, this is an important book for anyone to read regardless of your age. On the same subject, I also strongly recommend Laurence Kotlikoff's "The Coming Generational Storm." I also recommend the two excellent books by Robert Stowe England: "Global Aging and Financial Markets" and "The Fiscal Challenge of an Aging Industrial World." Robert Stowe England's books not only give a detailed perspective of the upcoming fiscal stress on the U.S. due to an aging population, but, he also analyses this situation with many other industrialized countries. It makes for fascinating read. Thus, if you are interested in this pressing subject there is much material worth exploring beyond Peterson's. But, Peterson's book is a mighty good introduction.

Of all the many many books on the election, this is by far the best that can be read with equal profit by both Republicans and Democrats alike, in that it shows the mistakes BOTH the major parties have made in the past and how they are sadly doomed to make similar errors in the future. Do you want a decent eduction, healthcare program and pension plan for your present and future? THIS is the book to read, however you intentend to vote in November 2004. Yes, this book is THAT important. Christopher Catherwood, author of CHURCHILL'S FOLLY: HOW WINSTON CHURCHILL CREATED MODERN IRAQ (Carroll and Graf, 2004)

I once knew a panhandler, good at it, who taught me his methods, sitting on a park bench. Destined for more upscale pursuits, I never used the lesson, but reading this book the instruction may come in handy some time soon. A devastating breakdown of the rampant confusions of budget, taxes, social security, it ends with a reminder that our founding fathers warned of two things, political parties (factions) and deficit spending. Although a conservative viewpoint shows itself, albeit marginally, in its depiction of the New Deal, the overall discussion fairly well lambasts both parties to the immensity of the budget tragedy underway and the worst of it is the way our political discourse environment can't even discuss the issues. They simply fester in the background. We have a responsibility therefore to get the facts outside of the media system of politicians, and this book is essential reading on that score.