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Tonight: I.O.U.S.A. “Live”

August 21st, 2008 . by economistmom

Tonight’s the special, one-night “live” showing of IOUSA the Movie with the post-movie simulcast town hall meeting with Warren Buffett, Pete Peterson, and Dave Walker.  Go see it if you can.  (Check the link on “live” for further information on locations.)  Then come back here to post your comments/instant reviews.  I’ll be back on here late tonight with a report of the experience from the northern VA theatre where I will be attending.

19 Responses to “Tonight: I.O.U.S.A. “Live””

  1. comment number 1 by: Martin

    The film also got a story on ABC’s Good Morning America this morning.

  2. comment number 2 by: economistmom

    Well, who saw it, and what did you think? The post-movie discussion was a little surprising to me in the following ways: (i) Warren Buffett’s “polyanna” (as he put it) attitude in emphasizing that the economic pie would be bigger in the future, no matter these fiscal challenges and how we handle them; and (ii) Bill Niskanen’s ability to promote the Cato agenda in what I thought was supposed to be a non-partisan discussion. (For the record, Bill Niskanen and Cato are NOT part of Concord’s Fiscal Wake Up Tour.)

  3. comment number 3 by: B Davis

    Well, who saw it, and what did you think?

    I just saw it and I was most surprised by those same two things in the post-movie discussion. When Bill Niskanen went into his detailed plan, I remember thinking “Whoa! I think we’ve just left the land of consensus and entered the land of debatable policies”. I was glad to hear the AARP representative at least mention the fact that there was disagreement on that.

    I was also surprised by Warren Buffett’s “polyanna” comment in that he didn’t add a disclaimer about the fact that we still face serious challenges. Having authored the story “Squanderville versus Thriftville” summarized in the movie, I’m sure that he would agree with this. In fact, his comment about the future cost of defending the country did bring up a topic which I’ve wondered about recently. At this link, I looked at the future liabilities for Social Security and Medicare which make up most of the $53 trillion number that David Walker mentioned. I believe that for Social Security, this refers to those projected benefits which will not be covered by projected revenue from FICA taxes (and taxed benefits). I believe that this is largely the case for Medicare Part A as well. However, I believe that Medicare Parts B and D are both financed from premiums and the general fund. Do these liabilities include both of these? If so, Warren Buffett has a point that this is similar to monies from the general fund which are slated to be used for National Defense. This is why I find it much more understandable to gauge our future challenges by looking at the projected revenue, outlays, and resultant debt as given in Table 13-2 of the Analytical Perspectives from the most recent U.S. Budget. I’ve posted that information at this link. As can be seen, the debt held by the public is projected to reach 154.4 percent of GDP by 2080 if certain proposed entitlement changes are adopted and 283.4 percent of GDP if they are not. Both are higher than the prior maximum of 108.6 percent of GDP reached at the end of World War II.

    I noticed that David Walker did respond stating that all of the liability numbers are official government numbers. Hence, I suspect that this is a misunderstanding and that he and Buffett (both of whom I respect) would have come to an understanding if the discussion had continued. On that topic, I would find it interesting if they televised a continuation of the discussion, at least including Buffett, Peterson, and Walker. I would even pay for another ticket to watch it!

  4. comment number 4 by: B Davis

    Just a couple of other quick impressions on the movie. Those who feel that the Concord Coalition and the Peterson Foundation are too tough on Social Security cannot really make that complaint about the movie. As I recall, the movie itself did not make any references to Social Security as being the main part of the problem. In fact, the movie made a quick reference to the fact that the Social Security surpluses are currently masking a portion of the deficit. Also, I believe that at least three of the participants in the post-movie discussion (Walker, Peterson, and the AARP representative) explicitly said that Medicare is a much larger problem. Even after one or two of them said that, however, I noticed that the Bill Niskanen of the Cato Institute immediately went back to discussing Social Security. In any case, he was the only person in the movie or afterward who spoke of radical changes to the current program.

    The other issue is that I noticed was that there was still much confusion about the difference between the unified deficit (which does NOT include the monies owed to the trust funds) and the $9.5 trillion federal debt (which does include those monies). As I mentioned, the movie did quickly mention that Social Security surpluses have been masking the deficits. Still, there was talk about the debt going down by several billion dollars and the problem with the debt clock not being able to run backwards. As the budget numbers at this link show, the gross federal debt that is shown by the debt clock has not decreased since 1969, at least not year over year. Although I understand that the unified deficit is the difference between revenue and outlays in the unified budget and has some economic significance on an annual basis, I think that it serves as a distraction in any discussion of our long-run financial condition. That’s long been one of my personal pet peeves.

    By the way, the “Squanderville versus Thriftville” story that I mentioned in my prior comment can be found at this link.

  5. comment number 5 by: M Gilleland

    The movie did an excellent job of not over dramatizing the problem which was the risk I was most concerned with–it’s daunting enough on an objective basis. It came across as fair and balanced.

    Regarding Buffet, my sense is that his role on the panel was to ensure that the discussion wasn’t all “doom and gloom”, to highlight the strengths and opportunities that we as a nation still have at our disposal if we don’t let this problem overwhelm us before or after reaching a financial and political crisis stage.

    My only critique is that the panel totally whiffed on the first audience question about how economic growth (driven mainly by consumerism) would be affected if there is a shift towards higher individual savings (fast or slowly.) I didn’t see how any of the responses addressed the question.

    Also, David Walker is a national hero. I hope more Americans come to hear his message and know his name.

  6. comment number 6 by: economistmom

    I think this is one of my favorite reviews of the movie, from Asher Goldstein of the Huffington Post: http://www.huffingtonpost.com/asher-goldstein/stop-what-you-are-doing-g_b_120446.html.
    Asher came into it as a skeptic, expecting the movie to be a “diatribe of sorts” promoting an “agenda” through two oddly-chosen (not very “charismatic”) characters (Dave Walker and Bob Bixby), and came out of it professing that “I.O.U.S.A. is the most crucial film, the “must see film”, of this year” and coming to understand that Dave and Bob “are the perfect protagonists for the picture (and cause) because of their passion and standing to discuss the subject matter with a nuanced authority that others would lack.”

    These are the folks I’m most interested in hearing reactions from–the skeptics who came into it believing what Asher did going into the movie: that the movie was a bit of alarmist propaganda with a narrow, selfish agenda. Especially those who wrote that that’s what the movie was about, even before they even saw it.

  7. comment number 7 by: Brooks

    Diane,

    I had the same thoughts re: Buffet. I said to my girlfriend as we exited, “Well, good thing Buffet was there to tell everyone ‘Actually, folks, nothin’ really to worry about. We were all just kidding. It’ll all be fine’”.

    Having said that, there should have been a better refutation than Walker just pointing out that the spending projections were as a percent of GDP, because Buffet’s point was that whatever is left in aggregate after-tax income (GDP less taxes) will be much larger in real terms than what it would be today. Someone involved in the Tour should crunch the numbers and refute Buffet’s point with a number or two.

    I have some other thoughts, but no time right now.

  8. comment number 8 by: Brooks

    As follow-up to my comment above, Buffet may have been referring to real GDP per capita. My point is the same either way (and both should be analyzed to refute his point).

    Buffet’s point is that even if we end up having to pay a much larger portion of our income in taxes to pay for the projected spending, we’ll be so much richer that we’ll still be just fine — that our after-tax income, in real terms, will be just fine, perhaps higher than it is today despite the higher level of taxation.

    Here’s what I think should be calculated:

    1. Project real GDP and real GDP per capita over the next several decades. NOTE: Growth rates would have to be adjusted to take into account the dynamic effects of higher taxation chosen in Step 2, so it may be an iterative process. Or one could just start with real dollars (not as a percent of GDP) and work from there if that’s simpler.

    2. Assume that, sooner or later, projected spending is (other than an acceptably low level of ongoing debt and annual deficits) paid for with tax revenues at whatever level of taxation as a percent of GDP is necessary (35%, 40%, whatever)

    3. Calculate the real after-tax GDP and real after-tax GDP per capita and compare it to today’s.

    Scenarios can be run for what happens if we wait X or Y number of years to start essentially paying for spending rather than allowing debt-to-GDP to grow, but the question is the same: Is it or is it not likely that we will be sufficiently wealthier in the future that our real GDP per capita will not suffer even if we pay for projected spending? If Buffet is wrong — and I think he is wrong — this should be demonstrated.

  9. comment number 9 by: economistmom

    Brooks: gee, thanks for that (tough) homework assignment! I agree, that’s what should be calculated, but I think the “intuition” behind why that calculation is likely to show that Buffett is wrong is that the economy can’t grow fast enough to keep up with the compounding interest on the debt… and while the interest is compounding with national saving not turning around, a “vicious cycle” will feedback on economic growth at the same time. I.e., it’s ironically the very growth that Buffett is counting on to make his “don’t worry” case that is exactly what we’ll lose if we indeed “don’t worry.”

  10. comment number 10 by: Hilary S. Gavenda

    I thought that the way Buffet brushed this whole thing off was the height of hubris. His comment to the lady from New Jersey to better herself and everything will be fine was the epitomy of elitism. He may be able to make a boatload of money but he acted like an ass on that stage and I think that David Walker was referring as much to him as to anybody else when he said to stop listenin to the B.S. et al…
    As to the movie itself, WOW!!!!!!!!!! it was so powerful and I liked Bob Bixby and David Walker, they are national heroes and should be treated as such. The only problem I have with the message is the whole get involved part where they say holding the politicians accountable is the big step that we need to take. That does not address the voters who will never vote against their getting their piece of the pie, and let me list a few of them here for you, welfare recipients, medicare and medicaid recipients, (I noticed that the AARP guy did not offer to give back the drug benefit), Federal workers who have the best health benefits in the country, Blacks, 90% of whom will vote for a black man who has done nothing much of note and belittle black men and women who have climbed their way to the top of the heap (Ms. Rice, Colin Powell, Clarence Thomas…) simply because he is black, and illegals who have no vested interest in doing the right thing. All of these factors make the voting process the avenue that, in my opinion, and I make no bones about my expertise, is going to be least effective. If these people continue to be able to vote then the republic is effectively doomed.
    Brooks, I am not sure if I understand why your equation or question, if you will, is relevant, considering that the federal government has no authority to be taking my money and spending it, on social security and medicare. Even if you say they do , or that it is a moot point now, then the way they are spending it is impossible to defend morally. It is, i believe at this point, and actually probably way earlier than this, criminal to continue on in this fashion after being made aware of the facts.

  11. comment number 11 by: M Gilleland

    Diane,
    I liked Asher Goldstein’s review too until he suggest the possibility that the actions that have led us into the current fiscal imbalance problem is a conspiracy by our elected leaders to destroy America. I have no idea how big of an audience he has but that remark is ridiculous and disruptive to the debate.

    Or, this is his way of making clear what he really thinks which is that our leaders (at least at the federal level) are “morbidly incompetent”.

    Perhaps an alternative explanation of how we got here is the flawed nature of our political structure (and the difficulty for leaders to rise above it) that focuses too much on short-term planning and results at the expense of long-term effects — covered fairly well during the town hall meeting after the film.

  12. comment number 12 by: B Davis

    Brooks: gee, thanks for that (tough) homework assignment! I agree, that’s what should be calculated, but I think the “intuition” behind why that calculation is likely to show that Buffett is wrong is that the economy can’t grow fast enough to keep up with the compounding interest on the debt… and while the interest is compounding with national saving not turning around, a “vicious cycle” will feedback on economic growth at the same time. I.e., it’s ironically the very growth that Buffett is counting on to make his “don’t worry” case that is exactly what we’ll lose if we indeed “don’t worry.”

    I agree. In fact, the second graph at this link shows that compounding interest on the debt is projected to start increasing exponentially starting in about twenty years. As noted toward the bottom of the page, these numbers come directly from Table 13-2 of the Analytical Perspectives from the most recent U.S. Budget. In addition, this shows the increase in interest costs IF certain proposed entitlement changes are adopted. The budget does not give the interest costs if those proposed changes are not adopted but it does project that the debt will be almost double by 2080 in that case. Hence, interest costs would almost double as well by then.

    In any case, I was glad to see that the discussion between Buffett, Walker, and Peterson did continue on CNBC this morning. You can find Part 2 of a transcript and a video of Walker speaking at this link. On the second page of Part 2, there is a video of Buffett speaking with the interviewer in theater seats. As noted in the transcript, Buffett says the following:

    So it’s–what you worry about is when the debt starts spiraling out of control, when it goes up year after year after year as a percentage of GDP, because eventually when that occurs people–if you try to borrow money around the world in your own currency, the world will say no. That’s what happened in South America in the past, it happened in the–in the Asian arena. We are able to borrow money in dollars. The world trusts the dollar. If we tried to run our debt up to 3- or 400 percent of GDP, nobody would want debt denominated in dollars.

    Hence, there does seem to be room for agreement on this matter. Perhaps someone should show Buffett the government’s own projections from Table 13-2 or elsewhere. In any case, if you click on the “TRANSCRIPT/VIDEO PART THREE: Three Hours With Warren Buffett - Live From Omaha” link on the right side of the page and go to page 2, you’ll find a video with Buffett, Walker, Peterson, and the representative from AARP.

  13. comment number 13 by: Brooks

    Diane,

    I understand, but I think you’re assuming that we don’t start essentially paying for our spending for a very long time, and in the meantime keep piling up debt at a rapid rate, which is indeed one scenario. (In other words, assuming that taxation as a percent of GDP does not rise sufficiently to cover all or almost all of the growing spending for a very long time)

    Another scenario could be if, say, in 5 years or 10 years (as opposed to now) we “get religion” on fiscal responsibility and stop adding to our debt (or limiting deficits to amounts that do not grow our debt-to-GDP ratio), or perhaps even start reducing debt or debt-to-GDP. In that case, the projections of debt and interest expense would be less severe than current projections, right? So the question becomes, if we start limiting/eliminating deficits (or running surpluses) to X extent beginning in Year Y, what would be the trend line in real after-tax GDP per capita?

    At one extreme, we could start with a (purely hypothetical) scenario in which we balance budgets starting in the next fiscal year and continuing every year thereafter. So we have ongoing interest expense of our existing debt, but our debt is not growing, and, since GDP is growing, our debt-to-GDP is declining, as is interest expense as a percent of GDP assuming constant (or, I assume, constant weighted average) relevant interest rates. In this scenario, we have spending trending upward (per current projections) and the question is, if we raise taxes enough to cover spending, what is the trend in real after-tax GDP per capita?

    Same analysis could be applied to continuing on our course of fiscal irresponsibility for X number of years and then introducing balanced (or more balanced) budgets (or even surpluses).

    In any case, even if it turns out that Buffet is wrong in all scenarios, it is worth demonstrating, for reasons made clear last night by Buffet’s throwing a monkey wrench into the whole message of the importance and urgency of accepting major sacrifices to change course and adopt fiscal responsibility. Also, it would provide sensitivity analysis related to this question: under the assumptions of one scenario vs. another (how soon we get fiscally responsible to one degree or another), how close or far from being right is Buffet.

    As for the number-crunching, I’m no economist (so please correct me if I’m wrong), but it seems to me that the tough one is the dynamic analysis (GDP growth rates under various levels of total taxation), but once the assumptions are made for that variable, the rest is pretty straight-forward, using projected population data, projected spending, and revenues per the assumption of aggregate taxation as a percent of GDP (or of an assumption of revenues themselves, sufficient to cover projected spending), an interest rate applied to whatever debt level we have in each year, etc.

    Given that perhaps the biggest obstacle to persuading the public — other than ignorance — is cognitive dissonance combined with the related desire to reach a conclusion (to convince one’s self, in effect) that major sacrifices are not really necessary and individuals and organizations offering some basis for people to reach such a conclusion, I can’t overstate the importance of clearly refuting “polyanna” messages such as the one conveyed by Buffet last night.

    And by the way, while I applaud IOUSA and everyone behind it, with particular kudos to Bob Bixby (who not only offered excellent insights but also an entertaining wit) and David Walker, I wish it had done more to debunk the particular, commonly-heard, easy solution / “free lunch” myths that people will encounter from politicians, talk radio blowhards, etc. so that the public — the voters in particular — will call the bullsh*tters on their bullsh*t and it will hurt the latter more than it helps them.

    I also think there should have been more promotion of website(s) to visit as next step. The next step by the audience is key. And the best next step is for them to visit a website (Peterson’s or Concord’s), get more information and hopefully get on an email list so that they can become an activist force.

  14. comment number 14 by: Brooks

    B Davis,

    Please see my comment above addressed to Diane.

    In your analysis using Table 13.2, the assumption is a continuation of taxation at about 18% of GDP, and in that scenario, debt and interest expense spiral out of control. By contrast, I’m addressing scenarios in which, at some point between immediately and in a couple of decades when we simply can’t avoid paying our bills any longer, we start balancing budgets (or substantially reducing deficits or running surpluses) and are no longer adding to our debt or at least not adding to our debt-to-GDP.

  15. comment number 15 by: economistmom

    Here is a story that will appear in Saturday’s Washington Post on the post-movie town hall where Warren Buffett speaks of the “bigger pie” and prompts Dave Walker to disagree with him: http://www.washingtonpost.com/wp-dyn/content/article/2008/08/22/AR2008082201905.html. I’d like to think, based on the CNBC discussion this morning (that B Davis pointed us to) where Buffett doesn’t seem quite so “Polyanna”ish, that Buffett somehow felt compelled to offset the “gloom and doom” feel to last night’s panel, and that he just got a little too giddy about it.

    Buffett clearly worries about foreign investors losing enthusiasm to hold dollar assets (which will force U.S. interest rates up), so maybe he just needs to be reminded that as those interest rates come up, the compounding just gets more and more costly and “eats up” more and more of that “pie”–so we have to worry about less of even a larger pie remaining. Also, if it weren’t for the baby boomer generation (and the fact that baby boomers did not have nearly as many kids as their parents did), it would be a lot easier to rely on ongoing population growth to provide enough natural growth in the economy to keep up with the demands of supporting a relatively smaller number of older people. But right now that mechanism’s out of whack because we have too many new retirees relative to future workers, and too much of a pay-as-you-go system in our entitlement programs to handle this demographic bump in the road.

  16. comment number 16 by: Brooks

    Diane,

    While I’m certainly grateful that David Walker pointed out what he did, he did not really address Buffett’s point. Buffett’s point (or at least one way to look at it) is that real GDP per capita will grow sufficiently that future Americans will be able to pay a much higher percentage of their income in taxes and still be better off (i.e., have higher real after-tax income) than Americans today (or at least not be worse off). Walker did not really address that argument.

  17. comment number 17 by: B Davis

    In your analysis using Table 13.2, the assumption is a continuation of taxation at about 18% of GDP, and in that scenario, debt and interest expense spiral out of control. By contrast, I’m addressing scenarios in which, at some point between immediately and in a couple of decades when we simply can’t avoid paying our bills any longer, we start balancing budgets (or substantially reducing deficits or running surpluses) and are no longer adding to our debt or at least not adding to our debt-to-GDP.

    I agree that the projections in Table 13.2 are just a starting point for discussion. It’s important to remember that they are projections under current law, not predictions. It’s likely that, as the debt reaches historically high levels, something in the economy will “break” and/or we will be forced to change current law. However, I think that the projections are useful since they come from the government and have been similarly pessimistic under both Clinton and Bush. They are unlikely to be accused of having been created by doom-and-gloomers. In fact, I noticed that Walker is using some much more pessimistic projections. In the Washington Post article that Diane referenced (and I believe in the movie), Walker stated that the national debt could reach 244 percent of GDP by 2040, possibly leading to economic catastrophe. Table 13.2 puts it at just 34 to 52 percent of GDP by 2040. Hence, I would be curious to know Walker’s source. If it is a source that most people would find credible, the argument for quick action becomes even greater.

    In fact, the projections in Table 13.2 may be overly optimistic in some ways. On looking at it again, it is projecting that discretionary outlays will drop from the current 7 percent or so of GDP to 4.7 percent of GDP through 2080. This seems highly questionable. If they can be brought down only to 6.7 percent of GDP, then receipts of 20.3 percent of GDP (close to the peak that they reached in the tech bubble) would result in the same projections.

    In any case, I agree that additional projections may help. I do think that you have to be careful not to overcomplicate the message for the public. However, the message must be accurate and credible. By the way, I did look into the relationship between debts and deficits in points 5 and 6 at this link.

  18. comment number 18 by: Brooks

    B Davis,

    the projections in Table 13.2 may be overly optimistic in some ways

    FYI, CBO projections actually understate how quickly our fiscal imbalance would spiral out of control, for two reasons. First, in CBO’s Long-term Outlook reports, they assume a single rate of GDP growth for all scenarios — high revenue (i.e., high taxation) or low, high spending or low, huge deficits or smaller. Second, this growth rate is not adjusted downward in scenarios in which the effects – direct and indirect – of fiscal irresponsibility (either much higher spending driving much higher taxation, or much higher and rapidly growing deficits and debt-to-GDP) would be expected to slow growth or perhaps cause recession. So the assumed GDP growth rate is the same with taxation (revenues) at 20% of GDP as it is with taxation at 30% of GDP. And the growth rate does not take into account the likelihood that much higher and rapidly growing deficits and debt-to-GDP would put substantial upward pressure on interest rates that would slow growth or perhaps cause recession. So basically, if we continue on our current course, things will go south even faster than the CBO projections show.

    To see the above, go to http://www.cbo.gov/doc.cfm?index=8877 and click on the “DATA” link, then on the spreadsheet click on the “Real GDP” tab (you may have to scroll to the right to get that tab). There is only one set of GDP projections (one column containing a figure for GDP for each year, as opposed to multiple columns of GDP projections related to each policy scenario). So they make a single set of GDP projections (one GDP figure for a given year) that they apply to all alternative policy scenarios, using it as the denominator in representing spending, revenue, and deficits all as a percent of GDP).

    I do think that you have to be careful not to overcomplicate the message for the public.

    Absolutely. I wasn’t suggesting that anything complicated be presented to the general public, only that at least some crude analysis be done sufficient to refute Buffett’s claim, first of all to the satisfaction of Buffett himself, but also to have a couple of figures (and, ideally, a chart for appropriate venues) ready to support the refutation, whether presented to the public proactively or as a response to anyone who makes the argument that Buffett made. Because Buffett is right about one thing: the ultimate, bottom line question (or at least one key one) is “What will happen to real after-tax per capita income?”. Just for illustration, I could tell Joe, who now pays 20% of his income in taxes that, unless the nation makes major sacrifices now, in ten years he’ll be paying 30% of his income in taxes, implying that accepting those sacrifices now is important and urgent. But if someone comes along and says: “Joe, you make $50,000 annually. In ten years you’re gonna make $100,000 in today’s dollars. So now your after-tax income is $40,000 and in ten years your after-tax income, in today’s dollars (real terms), will be $70,000. So relax. Nothing bad will really happen if you don’t accept those sacrifices now.” Assuming that argument is invalid, it’s important to prove that to Joe, convincing him that his real after-tax income will indeed suffer. Otherwise, asking Joe to accept major sacrifices now is a very tough sell.

  19. comment number 19 by: B Davis

    FYI, CBO projections actually understate how quickly our fiscal imbalance would spiral out of control, for two reasons. First, in CBO’s Long-term Outlook reports, they assume a single rate of GDP growth for all scenarios — high revenue (i.e., high taxation) or low, high spending or low, huge deficits or smaller. Second, this growth rate is not adjusted downward in scenarios in which the effects – direct and indirect – of fiscal irresponsibility (either much higher spending driving much higher taxation, or much higher and rapidly growing deficits and debt-to-GDP) would be expected to slow growth or perhaps cause recession.

    I agree that there are likely to be large negative effects if the debt-to-GDP surpasses its prior World War II high. However, I’m not prepared to critique the CBO projections, at least until I read the entire report. I do think that their alternative fiscal scenario is the important one to look at since it seems very likely that most of the current tax cuts will be extended and the AMT will continue to be indexed to inflation. The projections in this scenario are much more negative than the ones that I quoted from the budget. As I mentioned, the budget projected that the debt would reach 34 to 52 percent of GDP by 2040. The alternative fiscal scenario in the CBO report, however, projects that it will reach 183 percent of GDP! This is in the neighborhood of the 244 percent quoted by Walker so he seems to be using a similar source.

    Anyhow, thanks for providing the link to the CBO report. I’ve seen some of their past Long-Term Budget Outlooks but hadn’t checked out this one. I also listened to the first half-hour of the webcast at the above link and found it interesting. I’ll probably listen to the rest if I get a chance.

    I do think that you have to be careful not to overcomplicate the message for the public.

    Absolutely. I wasn’t suggesting that anything complicated be presented to the general public, only that at least some crude analysis be done sufficient to refute Buffett’s claim, first of all to the satisfaction of Buffett himself, but also to have a couple of figures (and, ideally, a chart for appropriate venues) ready to support the refutation, whether presented to the public proactively or as a response to anyone who makes the argument that Buffett made.

    As I said, I haven’t yet read the CBO report but I did notice that they have a section titled “What Are the Costs of Delaying Action on the Budget?”. In any event, it looks to have some data that could help to communicate the situation to the general public. For example, figures 1-1 and 1-2 seem especially informative. In fact, I think that the message given to the public can be made too simple as well as too complicated. The more I’ve thought about it, the more I question the usefulness of the $53 trillion figure given for the present value of our future liabilities. As I understand it, this is the amount of money that would need to be set aside today, earning market interest rates, to cover all of our debts and promised entitlements. I suspect that many people may simply look at this number and think that the situation is hopeless. Or they might believe that the only solution is to cut all entitlements to the bone. My point is that this number gives no indication of how much restraint in entitlement spending (or increase in revenue) will be needed to address the problem. It simply does not provide enough information. Figures 1-1 and 1-2 in the CBO document, however, give a very good indication. As you say, the CBO projections, like all projections, have their limitations. However, I suspect that they are every bit as accurate as the $53 trillion figure. Anyhow, thanks again for posting the link to the CBO document.