December 23rd, 2010
03:10 PM GMT
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New York (CNN) – What does it take to get a conservative politician, liberal economist and billionaire businessman to agree? A crisis - and that is exactly what David Stockman, Jeffrey Sachs and Mort Zuckerman worry the U.S. will face as a result of the $858 billion tax package just passed by Congress.

"It is a racket what is going on in Washington. Here we had a deficit commission, we discussed these issues for months and all of the sudden the President and the Republicans get together and there’s another trillion dollars given away over 2 years. It’s really shocking stuff actually," says Sachs, a Columbia professor and special adviser to the United Nations.

"These debts essentially are a dagger pointed at the heart of the economy and sooner or later that dagger is going to strike so we now sort of justify this (tax package) in the short run because nobody thinks in the long run," adds real estate magnate Zuckerman.

We invited these three men to Time Warner Center to participate in a year-end discussion on the challenges facing the U.S. economy and, perhaps more importantly, the remedies that should be put in place.

We reached across the political spectrum fully expecting a lively debate and fair amount of disagreement. What we got instead was a surprising amount of consensus and a universal sense of outrage over the lack of political leadership in Washington.

"We have basically two parties, two free lunch parties, competing in a fiscal arena that is non-functional," fumes Stockman the director of the Office of Management and Budget under Ronald Reagan.

Given the bitter partisan bickering that has consumed Washington, Congress may seem like an easy target. But our panelists did not stop there. Stockman spoke out about the casino Wall Street has become and the influence of hedge funds. Sachs railed against Larry Summers for bailing out the banks without any strings attached. And Zuckerman took shots at the rich, for not paying their fair share.

As I listened to the discussion it occurred to me that the U.S. might need to see political change before the country can tackle the massive debt problem. The Tea Party rose to prominence talking about the deficit, but it is unlikely they will appeal to voters in the center or on the left of the political spectrum. We need a consensus builder, someone who can convey a sense of urgency. Massive cuts in defense spending. A national sales tax. Means testing social security. These are not popular ideas and our panelists insist they will be necessary.

Are Americans as a society ready for that reality? I have my doubts, but Jeffrey Sachs who has consulted governments around the world makes a compelling argument. "If the rich were standing up and saying, we do our part, the mood in this society would change enormously. We’d start getting serious again like grown ups and thinking about the real situation in the United States."

My hope for 2011 is that he is right.

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soundoff (22 Responses)
  1. Nami

    Is it free lunch parties or freelance parties we refer in the article? Hope to be verified.

    December 23, 2010 at 11:46 pm |
  2. Robert Esperanza

    I am all for lower taxes but what programs will you cut? Services for the elderly? Police? Fire? How about social security? I know what some will cut… programs for the poor… programs for the disabled… the elderly… you know… the least among us? How about cutting programs for roadworks and tunnels? Remove the public railway system? God forbid you think about defunding the military… that most sacred cow of conservativism… how about border security? It’s a joke anyway you might as well just open them… and if you wanna increase border security, where will you get the money? So I am tired of hearing we must have lower taxes. Instead, I want to hear which programs we will cut to make ends meet. So low taxes? Which programs do you want to cut?

    December 24, 2010 at 12:17 am |
  3. Jeffrey Allen Miller NY

    This is entertaining....but that is all.

    We need every business owner on Main St. U.S.A. to stand behind that flag they wave so proudly and agree to hold similar discussions at every community center across this nation - with the goal of improving that town's economy.

    Furthermore, these business leaders need to tap and invest in local talent to innovate their business: They grow in exchange for taking the risks and hiring new talent to compete in the global marketplace. I propose a difficult task, that requires face2face interaction in a day everyone prefers to hide.

    So, the focus turns to the local level first, to grow business and get people back to work, I see no changes coming anytime soon.

    December 24, 2010 at 12:20 am |
  4. ex-Grazia

    'Democracy is not the best form of government, but it's the best we've got'
    Winston Churchill

    The decadence of democracy is summed up in this article.

    In an ideal government, The leaders know what must be done, it's simple maths, massive deficiet = cutting cost.
    In democracy, the leaders know what must be done, but place their political future over the long-term good, at the behest of it's ill-informed public, and inevitably at the expense of the country's true interest.

    December 24, 2010 at 12:25 am |
  5. ChoralProf

    Increasing government debt is the worst answer for an attempt at stimulating the economy; it can only exacerbate the looming economic threat. We are extremely short-sighted, and I'm more convinced than ever that it will take the recovery from a disastrous crash for this to be corrected. Through the plethora of ill-informed opinions, favor can only be won, it appears, by catering to those of us who think we know as much as anyone with actual training and expertise. The correct course can only be achieved through the sacrifice of political careers from those who will do what is necessary. I can hope we would recognize these politicians' dedication at some point without having their work smeared by others trying to claim credit.

    December 24, 2010 at 12:52 am |
  6. Acropolis

    Hopefully, very soon, China will be a new market for all Western countries. That might save us.

    December 24, 2010 at 2:06 am |
  7. S. Topor

    Promises of new ways of production technology underpin the transfer of jobs abroad.
    While politicians were talking about abolishing the education department in the U.S. China was studding students in the best North American universities to educate their citizens.
    The jobs problem is structural that will take a socialistic philosophical approach. The individualistic scheme that the neoliberal corporations have ensued upon us cannot be relied on. It seems production of economic goods is a zero sum game. Asia wins the West looses out.

    December 24, 2010 at 2:46 am |
  8. Grant

    There is nothing wrong with tax cuts when you are running a surplus. There is also a case for it under certain unusual circumstances when stimulation is required. In Australia, we went into deficit during the GFC to stimulate the economy and I thought that was a sensible strategy as there was a plan to go back to surplus and both parties want this to happen. The deficit was also relatively small.
    The US situation is wholly different where tax cuts were implemented while the government had a deficit already and were facing massively increased spending for the Iraq war. This was a criminally irresponsible at the time, in my opinion, the height of stupidity. The GFC and associated bail outs have raised the US deficit from alarming levels prior to GFC to levels that have the potential to bring down the US economy sometime in the not too distant future and possibly other economies as well.
    It will end in tears and worse, just a matter of time (I can hear the ticking).

    December 24, 2010 at 7:51 am |
  9. Rod

    God bless America, a society in terminal decline.

    December 24, 2010 at 8:59 am |
  10. Patrick Moyna

    What went up will come down, it happened to the Spanish, it happened to the turks, it happened to the brits. And this time around the US will not be able to export its deficit as reams of green rectangles of paper, as did Germany prior to WWII, as foreigners look a bit more suspicious.
    Only bad thing, China will take over and send us their reams of paper rectangles.

    December 24, 2010 at 12:20 pm |
  11. fiercestream

    We're not yet past the brink. At least we're (slowly) awakening to the idea that our problems are deeply rooted in some of our fundamental populist cultural ideas like the American dream, and 'freedom'. Once we stop lamenting the loss of our three-SUV attached garages, that we could pay for with two-community college-driven incomes made working no more than 40 hours a week, we'll be fine. We need an attitude adjustment. We need to be WAY better educated and less addicted to cheap trashy consumer goods. Check out the garbage dumpsters in your area during the week after Christmas, and you'll get the picture. We need to quit tying out economic outlook to our values.

    December 24, 2010 at 1:06 pm |
  12. Murad

    "real estate magnet Zuckerman"
    Does housing stick to this guy? Or did you mean real estate magnate?
    No wonder fiercestream said, 'we need to be better educated.'
    (Un)fortunately, the financial portion of that education is about to become somewhat rapid and I think Ms lake understands this. However, as long as people around the world are willing to purchase US debt then the comatose economy will survive another day...until when is the question.

    December 24, 2010 at 7:49 pm |
  13. Oladipo Akinyemi Omole

    Maggie darling,
    Compliments of the season and Merry Christmas. I really loved the opening shots on New York Life.It's really beautiful.
    I wasn't really sure of what Mr Zuckerman meant by the rich " not paying their fare share" in taxes, but that's a bit belated now that the tax package has been sealed by Congress. But I keep asking what's the fair share for the rich?Is the $858billion tax package a debt also or just a kind of an "opportunity cost". It shouldn't be seen as a give-away like Jeffery Sachs and Mr Zuckerman said.That's pretty obvious isn't it?
    It seems consumption taxes can only be effective in addressing the deficit if Americans are favorably disposed to them,but they seem like a good strategy if they're moderate.Nobody has advocated a zero tax policy yet.
    The campaigns in Afghanistan,Pakistan, Africa and US commitment to NATO too may make cuts in defense spending quite difficult to achieve, but it's not expedient to cut medicare .That's pretty obvious isn't it? Consumption taxes seem to be the way out and they give the average US citizen a measure of control in this matter.
    The interest rate is near zero and I keep wondering where it leaves the banks.How do banks survive in the near zero interest rate regime?
    Well darling, I must say it's been a wonderful year.
    Yours sincerely,
    Oladipo Akinyemi Omole

    December 25, 2010 at 2:38 am |
  14. Oladipo Akinyemi Omole

    Ok thanks and I'm much obliged.Cheers.

    December 25, 2010 at 9:24 pm |
  15. Aditya

    The present generation is the future of America. Check out this article about what college kids should do to be successful and become the leaders of tomorrow.

    December 25, 2010 at 10:47 pm |
  16. Anthony Murray

    Now that someone finally understands and is in touch reality, when do we as a country start to react accordingly. There has been enough talk, it is time for action. So I think we need to start to do for the good of all and discontinue the practice of being self serving, We will find that if we act in this manner that at the end of the day we will all benefit.
    And the future of our children will be more secure.

    December 27, 2010 at 4:08 am |
  17. Anthony Murray

    There used to be a distinct difference in the politcal parties. Now it is difficult to decide where one stands versus the other. There not supportive of each other ( Party Members) and are they really the voice and the conscious of America. Do they really speak for the people they are sworn to protect and look after, or is about politcal and financial gains for themselves;TV Reality Shows, Book Signings, Speaking engagements.

    December 27, 2010 at 4:29 am |
  18. scienceman

    A nice mess left for Generation Y. Thank you baby boomers.

    December 27, 2010 at 6:32 am |
  19. catherine

    I am an Australian and I am extremely upset about the state of US debt. We saw the effects on the markets when such a small country like Ireland needed help with their debt, imagine if the US went under, the whole world would be in chaos! I think congress has been extremely selfish in creating the stimulis package instead of going with austerity like Europe.

    December 27, 2010 at 10:21 am |
  20. Manuel Vilhena

    Very interesting. In Europe countries are running to cut debts whereas in the U.S. don't.

    December 28, 2010 at 7:55 pm |
  21. Oladipo Akinyemi Omole

    Ok.Thanks and greetings to the rest of the team.Cheers.

    January 11, 2011 at 12:55 pm |
  22. Oladipo Akinyemi Omole

    Thank you much and cheers.

    January 15, 2011 at 12:24 am |

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