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

• Author: Montanye, James A.
• Position: Book Review

Running on Empty: How the Democratic and Republican Parties Are Bankrupting Our Future and What Americans Can Do about It By Peter G. Peterson New York: Farrar, Straus and Giroux, 2004.

Pp. xxviii, 239. $24.00 cloth.

Hard evidence that the United States is technically bankrupt--that is, that the present value of its liabilities (upward of $74 trillion when discounted and summed over an infinite horizon) substantially exceeds the present net worth of the entire U.S. economy (approximately $42 trillion when similarly discounted and summed)--ought to concentrate the mind wonderfully. Why should "We the People" be concerned by liberal and conservative politicians alike committing to even more spending at this juncture? Where precisely lies the harm in piling on the promises when all the taxation, fees, predatory extractions, borrowing, inflation, and repudiation of the public debt will not pay for the existing stock of them? Necessity eventually will compel politicians to choose between providing the essential services of government and delivering on the past's confectionary promises.

Today's long-term spending commitments are tokens--placeholders that give future generations standing to argue for wealth transfers. The Supreme Court determined in Flemming v. Nestor (363 U.S. 603 [1960]) that entitlements such as Social Security are not tantamount to contractual relationships between citizens and the state to be defended constitutionally against unilateral abrogation. Rather, as Justice Hugo Black dissentingly paraphrased the majority's opinion, the state "is merely giving [beneficiaries] something for nothing and can stop doing so when it pleases" (at 623). However the Court's decision is read, today's entitlement commitments are not binding on future generations; believing otherwise encourages false inferences about our posterity's welfare.

Imagining that benevolent politicians can be persuaded to limit voluntarily the accretion of social promises, whose consequences will not be faced nominally for years, is a noble but inherently fatuous exercise. Politicians favor back-loaded taxing and spending agendas precisely because they garner votes today, but their fiscal ramifications fall due on another politician's watch. Any politician or party that contemplates legislative restraint for moral or fiscal reasons knows full well that others, whose jobs are less secure, will happily make those promises in exchange for campaign contributions and...