Joining host, Dennis McCuistion are:

• Mike George: Founder of Strong America Now and developer of the Lean Six Sigma Process; a technique for determining and eliminating waste, and
• David Walker: Former Comptroller General of the United States and CEO of the Government Accountability Office from 1998 to 2008. He is the author of Comeback America: Turning the Country Around and Restoring Fiscal Responsibility.

The discussion focuses on the sustainability challenges which threaten the US economic future. According to both guests, the survival of the Republic is at stake and in some cases we don’t even understand what the problem is.  Waste in government is at an all time high, with the Department of Defense being one of the government’s biggest wasters of resources.

The conversation differentiates between corruption and waste, spending increases between 2009 and 2010, and how much higher spending still is compared to receivables.  The challenges and solutions may surprise you.

Tune in to discover what needs to be done to reclaim our children and grandchildren’s future, and where, as always, we continue discussing things that matter with people who care…

Thanks once again for joining us…

Niki Nicastro McCuistion
Executive Producer/ Producer
Co-Founder

Virtually every sovereign nation in the world is over indebted with the United States leading the way. We’ve all seen the fiascos in Greece and Ireland and are awaiting the meltdowns in Italy, Spain and Portugal. While we may be familiar with the debt our federal government owes and what the implications are, we may not be aware of just how over leveraged other nations are.

ENDGAME examines the effect and impact of the present financial crisis on the world and the USA economy and examine what may happen when all these countries can no longer borrow.

Over the last 20 years the McCuistion Program has looked at various public policy issues that impact the United States and the world.   This 20 year retrospective focuses on several  key areas  presently at the core of American society. Experts discuss the history of these core issues, what has led to our present  credit crisis, and the  government boondoggle that has resulted.

We encourage you to view all McCuistion TV episodes, where you can both watch the videos and interact with the McCuistion team and other viewers.  You can also follow McCuistion TV on Twitter.

Join us this Sunday as we talk about things that matter… with people who care.

How bad are things? How much of the problem is health care? Can we tax our way out of this fiscal crisis?

Another day older
And deeper in debt

My own view is that the fiscal crisis is going to begin at the bottom and rise to the top. Already we have seen some local governments declare bankruptcy. Expect more of that. In the next several years, I believe some very large cities are going to announce that they cannot pay their bills. State governments will be next. Whereas local governments can declare bankruptcy, state governments can only default. A default by the state of California seems almost inevitable.

But is it conceivable that the U.S. government could default? Actually, yes. Every projection shows the gap between spending and tax revenues rising through time. And the problem at the federal level is basically the same as it is at the state and local levels: We made promises, mainly promises of benefits for retirees, that we were unwilling to fund.

Two years ago the first of the baby boomers started claiming early retirement under Social Security. Next year, they will start signing up for Medicare. Before they are through, 78 million people will quit working, quit paying taxes, quit contributing to our retirement system and start drawing benefits instead. And we are not ready for them. Not in Social Security. Or Medicare. Or Medicaid. By not ready, I mean we have put no money aside to pay for the benefits the baby boomers think they have been promised.

In terms of short-term cash flow, the Obama administration is forecasting that federal spending will be at 25% of GDP by 2020, while revenues will be less than 20%. To keep the deficit at no more than 3% of GDP (not zero, but 3%), an Urban Institute/Brookings tax analysis suggests that tax rates must rise by 40% beginning in 2015. That means the bottom 10% rate would have to climb to 14% and the top 35% rate would go from 35% to 48%.

The fiscal crisis  problem is not just a federal problem. State and local governments have unfunded retiree obligations of $2 trillion or more. Private companies have made (defined benefit) promises that are underfunded. And one-third of the baby boomers have an employer promise of post-retirement health care — almost none of which has been funded!

What I am describing is a huge gap between what the baby boomers think they have been promised and the resources available to meet those promises. What I am describing is oncoming generational warfare.

So let’s think about solutions to the fiscal crisis. As described previously at this blog, President Obama has appointed a commission on the federal debt, the National Commission on Fiscal Responsibility and Reform. Although nothing is for certain, many believe a value-added tax (VAT) will figure prominently in the proposed solutions.

But is a VAT tax, or any other tax, really an answer to our problems? Professor Laurence Kotlikoff and his colleagues have modeled the U.S. economy in the middle of a world economy to project the consequences of various policy proposals. For example, suppose we continue on the current path and fund the growth of entitlement spending with a VAT tax or a payroll tax or a consumption tax. What will the future look like for the United States as well as Europe?

Tax rates of this magnitude would be enormously harmful to the economy and are probably uncollectable. (Note that these are average tax rates; marginal tax rates would be much higher.)

Is there a better solution? Yes. We must move immediately from a pay-as-you-go (unfunded) entitlement system to one which is funded and in which each generation pays its own way. For Social Security and Medicare we have described how to do that elsewhere.

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This article can also be found on John Goodman‘s personal blog.

In the current unstable  economic climate where people are losing their jobs, their savings and the money they’ve invested, there is a need for financial wisdom for those who are ready to take control of their personal finances.  Douglas and Snider discuss topics related to stock market losses, personal financial planning, saving, job loss, and debt accumulation and payoff.

Stock Market Losses

For those who have incurred stock market losses, it could take 10-20 years for the money to be regained.  Consequently, people are going to have to save more and work longer.  Snider and Douglas, offer both suggestions and warnings for the ready investor during this time period.

Personal Finance

It is critical that a clear plan is in place for family finances, a plan that takes future financial goals into consideration. Expounding on the topic of personal finance, the experts  discuss financial wisdom principles and guidelines for saving, the safest places for you to put your money, what to do when you lose your job, credit, debt and more.  Further discussing what to do in the event of unemployment, Snider covers discretionary and non-discretionary expenses and how both play into the personal financial plan.

Borrowing and Paying Off Debt

After stating that it’s okay for people to borrow on a home or education and nothing else, they offer suggestions on the most effective ways to get out of debt.

In closing, they suggest the following: get your credit cards paid off, establish your emergency fund, make sure that your bank account savings doesn’t exceed the FDIC limits of $250,000, continue to contribute to your investments and retirement, and manage your FICO score.

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02.22.09 – 1724

• Stan Liebowitz, PhD., author of Anatomy of A Train Wreck & Director for the Analysis of Property Rights and Settlement
• Richard Bitner, author of Confessions of a Subprime Lender and Associate Publisher for Housing Wire Magazine
• Gerald P. O’Driscoll, Jr., Senior Fellow Cato Institute
• Ira Silver, PhD., Texas Christian University, Neeley School of Business

The 2009 economy is breaking records and not necessarily the ones we’d like it to break. As we navigate the recession, McCuistion and the program panelists discuss the extremity of the problem, the effectiveness of government policies and the future.

We are in what could be described as a post war recession.  People are feeling the crunch of increased debt, and so they are working to get out of debt. This causes a strain on the housing market and other markets that rely on acquired debt in order to stay afloat.

In September 2008 the recession officially became a serious issue.  However, on a percentage basis, the 1982 recession actually resulted in a greater job loss than what the American market has experienced thus far.  And although the stock market has had its failings, the decline may not be  as bad as some may think.   In the United States the market generally goes up each  year  and 2008 was not much different.  In 2009  growth will likely drop 1-1.5% .

Housing is one critical component of the recession, because most housing markets are imbalanced from an inventory perspective.  In order for the market to improve, there  needs to be a general belief that the market has hit rock bottom. However, as public policy  pushes towards foreclosure moratoriums, it will likely be 3-4 years before this happens.

The panelists go on to explain the meltdown of the mortgage industry and what led to the 2009 economy and what it will take to move forward. Citing moral hazards, reckless lending, investing and negative interest rates that caused the boom cycle, they  reassure viewers that pessimists are usually wrong.

Also covered during this television segment are the positive and negative sides of the Fed’s decision to expand the money supply,  changing  interest rates, and each panelist’s predictions of the 2009 economy as well projections for the future state of the economy.

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02.15.09 – 1723