Much of it dated back to FDR, who simply cranked up the printing presses to pay for the New Deal. One of those programs of his was Social Security, which was considered by most, and sold to the public as, a government run annuity. You paid into the insurance fund, and then at the end, you retired and collected what you had paid in. The reality was that Social Security was actually a massive Ponzi scheme. It was never funded, and politicians routinely increased what was being paid out and routinely cut the taxes needed to fund it. There was never a requirement that you could only get out what you had paid in. It was a pyramid scheme that depended on ever increasing numbers of young workers to pay for older retirees.
That was just the start. The Great Society brought us medical insurance programs like Medicare and Medicaid, which did the same thing. Sold to the public as insurance programs, they were anything but, funded entirely out of current revenues and taxes. By the Eighties the numbers were becoming large enough to worry about. By the Nineties they became scary, and by the turn of the century they were totally out of control. By some calculations, the bulk of American taxes and borrowing were going to pay for mandated entitlement programs.
Paying the Bills detailed these issues. It wasn't new stuff, but it was important stuff. The average politician wanted to do two things - lower taxes and raise spending. These were the things that got them re-elected. The American public didn't want to hear the truth, that they couldn't have their cake and eat it too. They wanted a steady diet of cake, cake, and more cake! A politician who promised them cake, and then told them it was good for them and non-fattening and, best of all, free, got elected. Very few presidents were able to balance the budget, and most of the time it was by accounting miracles and tricks. Some of these we exposed and some we simply recited the problems with.
Ultimately the problem was with the American public itself. They knew they were being lied to, but that was still better than facing the music and paying the piper. Every poll ever taken showed that the American public wanted these programs, along with every other government subsidy or handout available. They simply didn't want to pay for them, definitely not at the level necessary. It would require a national sales tax or value added tax, and income tax levels would need to rise significantly, as in they would probably need to double or more.
So how was it all paid for? Simple! First, simply crank up the printing presses and print more dollar bills, but that caused inflation, and had the problem in that it added to the deficit. Second, and ultimately more corrosive, was to borrow the money. The U.S. had the world's best credit rating, but eventually even America can only borrow so much money before people figure out it can't pay it back. That was the ultimate problem and cause for the Great Recession. Economies are cyclical, and recessions and depressions happen with regularity, but it makes a whole lot of difference whether you have money in your pocket when it happens, or if you owe the bank a shitload of money. It's no different for countries.
Paying the Bills came out just after Thanksgiving, and proved a sensation, though perhaps not in the way we had intended. It had been an election year, and George H.W. Bush had handily beaten Michael Dukakis, one of the most ineffectual candidates the Democrats had ever run. Within days of publication, it had made the New York Times Non-Fiction Best Seller List, and was the talk of the chattering classes across the country. Liberals condemned the book, saying it vastly overstated the costs of these wonderful programs, and that I wanted to throw the old, sick, and poor off the American gravy train. Conservatives, on the other hand, lauded these ideas, but said I had overstated the costs involved - we didn't need to raise taxes, but lower them! Worst of all, newly elected President Bush had famously (and stupidly) made his 'Read my lips! No new taxes!' pledge, and here I was saying he was wrong.
Joe Throttlemeyer, my co-author, an economist at Penn State, couldn't handle the nonsense and he dumped all the questions on me. For this book, my name had been listed first, and I thanked him ever so sweetly for giving out my number. Two weeks after the book came out, our agent at Simon and Schuster called me and told me that the Sunday talk shows wanted me. I had eschewed a book tour this time, but I couldn't turn down This Week with David Brinkley. Saturday night I drove down to Washington and spent the night in the Hay-Adams again, but without Marilyn. We had stayed there when I received the award lo those many years ago from the Bahamian government. She was staying home with the kids and promised to tape the show.
Welcome to the big leagues! David Brinkley was not Oprah Winfrey! He was a smart interviewer and had been around the Washington news game since before I was born. He was not going to be a pushover and ask puff questions. Worse, I wasn't his only guest that morning. He had me on along with 'The Lion of the Senate', Massachusetts Senator Ted Kennedy, perhaps the most liberal Democrat in the Senate. Kennedy had already been quoted disparaging the book. Nothing like a friendly audience to give you that warm and fuzzy feeling.
Mercifully I went through the makeup business fairly quickly. I had felt like an idiot doing it before going onstage with Oprah, and I still felt like an idiot. At least I didn't have to do it with Kennedy in the same room. That would have probably been awkward. I don't know why we had to do makeup, anyway. If you're a dark complexion they want you lighter, otherwise they want you darker, and not so shiny, and the camera adds ten pounds and all sorts of horseshit is going on. I left makeup and was sent off to the green room. I bet that Kennedy got his own dressing room. Then again, he had a house in Washington, on DuPont Circle I believed. Maybe he would just show up already polished and primed.
Eventually I was called out during a commercial break, and put in a chair at a table across from Brinkley. I looked around uncertainly, noticing where all the cameras were. Kennedy came out, all smiles, and greeted half the crew by name, and immediately sat down at his chair, a few feet away. He had probably done this a hundred times before. I was ignored, being beneath the great man. The setup was so that they could focus on each of us without anybody interfering with a shot of somebody else.
Brinkley started off by introducing the topic, and giving a quick synopsis of the book, and was surprisingly fair with it. Then he turned to me and asked, "Doctor Buckman, throughout your book, you state that any number of government programs have costs far higher than what have been stated by a number of people, and that in order to pay for them, taxes have to be dramatically increased. Surely you don't expect tax rates to be doubled, as you suggest in your book?"
"It's not a matter of what I expect to happen as it is that these are basic facts, and we need to acknowledge them if we are to have any hope of stabilizing the finances of this country. If you go to the store and buy something, sooner or later you have to pay for it. Congress has gone to the store and has bought a bunch of things. They've bought pensions, which is what Social Security is, and medical insurance, which is Medicare and Medicaid, and highways and dams and water treatment plants. Somebody has to pay for this stuff. Right now, we're just getting by, telling the entire world that, 'Sure, we're good for it.', but sooner or later the bill is going to come due, and the bill will be beyond belief."
"Senator, your response?"
Senator Kennedy gave a lengthy discourse on how the costs were nowhere near what I was stating they were, and that this simply was the Republican mantra of killing off needed social programs. He could have rambled on for the entire show, but Brinkley cut him off.