It's my privilege today to introduce our speaker Peter G Peterson those of us in the business Community know him as a highly respected and prominent investment banker. He founded and serves as chairman of the Blackstone Group in New York. He also chairs the Council on Foreign Relations in The Institute for international economics, and he has served on the board of directors of 3M Company for 17 years. During the Nixon Administration. He served our country as Secretary of Commerce and a special assistant to the president for international economic Affairs. He currently serves on the president's commission for entitlement reform. And that's a bipartisan group of 10 Congressman 10 senators and 10 private citizens. I have service continues in 1992. He founded the Concord Coalition with Senators Paul Tsongas and Warren Rudman. Nicole oceans mission is a simple one to tell the American people the truth about the budget deficit and other economic problems that are undermining our country's future now, mr. Peterson has the rare gift of explaining economic Concepts in a clear straightforward and understandable way. He sounded a National Economic Call to Arms in 1987 in an Atlantic Monthly article called the morning after and he talked about the dangers of Sauron government spending crumbling infrastructure declining productivity and declining savings the article won a national magazine award. Last fall the Atlantic publishing excerpt from his new book facing up how to rescue the the economy from crushing debt and restore the American dream. Now on the way in from the airport Andrew Davis and I started talking to him about his book and he asked if we had actually read it. Luckily. We had done her homework, but I am going to warn you if you mention his book to him. He will give you a pop quiz on the spot. Now there are a lot of self-proclaimed deficit Hawks circling around Washington. But Peterson has put his knowledge and experience where his values are in writing this book. He gives a clear explanation of the budget deficits caused the impact it has on our economy, but he also offers a plan to balance the budget by the year 2000 and it's not just the slash-and-burn solution. It's a positive vision for the future and offers options for redirecting billions of dollars to investment in basic research infrastructure health and education for low-income children and tax relief for the Working Poor to me Pete Peterson's life and bodies the American dream and he has the courage to step forward and asked us to face up to what we have to do to keep that dream alive. Please join me in welcoming him. Google thank you very much. Eric Eric, I wish I had met you sooner that the reason I asked you if you actually read the book as we have a bunch of humerus at the Blackstone Group and it every Christmas party the young professionals put on a Carnet game where you know hear the answers. What are the questions? This year and 1/2 a Peterson cuz this book facing up and come out in November. So it was fairly current the answers were a hundred thousand. 99,999 1 + 0 The issue of course is what are the questions the questions were how many books did Peterson print? How many did he sign and giveaway? How many were bought? And how many were red? Life, I just had Erica there I could have you no handle that. I've been making speeches now for about 35 years and more often than I care to remember. I got the following response after walking down the street. Someone will sell. Mr. Peterson. That was a memorable speech you gave. And I'm Indiscreet enough to occasionally say to them really. What do you remember? There's always a long painful paws. And the only thing anyone has ever remembered is a joke that I told. treibball, not the Peter Principle that the Peterson principle which is if you want anything to stick to the bones tell a joke, that is somehow relevant to the subject and perhaps I'll remember at least part of what you're talking about. So the joke I've been telling is one that Ted Sorensen President. Kennedy's assistant tells on me. He says Peterson and I were on an airplane the Mideast and shortly before the plane landed to wear and tear asleep up and say we're going to assassinate these two former public officials on a bipartisan basis. But he said we're going to give them their Last Wish. Trey says we go to Peterson and say I'd Peterson what's your last wish and Peterson says I have one last speech. I want to give to the plane on the relationship between entitlement spending in the federal budget deficit. They then go to Sorenson and say all rights, aren't so you've heard Peterson what your last wish and Sorensen says in view of what you just heard from Peterson. My last wishes to be shot first. So if my message today is a little harsh. I hope you can pick out a Democrat that you can also Sasson age so that it's a bipartisan effort here. Wind speeds for me is one too many. So I'll give you the short version of the basic theme of this book and put the Concord Coalition is all about IR you they're 3in parer an economic imperative a moral imperative in a political imperative that if we're going to get our economic gather and restore the American dream. We're going to have to raise productivity from his historically low levels to do that. We're going to have to invest much more if we're going to do that. We're going to have to save much more than four going to do that. We're going to have to temporarily consume less. and if we're going to do that in order to get back to Sorensen's joke, we're going to have to get to deficits and entitlements deficits because they have been devouring about 2/3 of this country shallow pool of savings and are largely about consumption and entitlements because they are entirely about a consumption now the Concord Coalition and intern I have put together a plan for the year 2002 balance the budget not because we're masochist or sadist or even fiscal Puritans, but because we really do believe that this is one critical element to restoring the American dream. Earlier, I injected a moral imperative. I noticed that several of you looking at me suspiciously since that doesn't come very convincingly from an investment banker, but it is also part of the rationale for doing something in the course of this book. I fell in love with the writings of what is probably America's most elegant in Morrow Morrow. Thank her Thomas Jefferson. I wish we had time which we don't for me to read you for example, a magnificent series of letters that he wrote to James Madison on the immorality of one generation passing on debts to another Another philosopher Eric Bonhoeffer put it very simply. He said the ultimate test of a moral Society is the kind of world that it leads to his children. So what are we leaving to our children? I will try not to drown you or depress you into deep Melancholia with too many statistics, but I honestly believe that the massive debts unprecedented interest cost staggering unfunded liabilities. And yes, ultimately taxes is nothing less than physical child abuse. Let me give you one indication of this. Few years ago. I read a book by Larry kotlikoff called generational accounting and what doctor kotlikoff does is look at all of our current bills all of our spending patterns all of our liabilities and compute what he calls net taxes, which is the taxes that each generation will have to pay nettle benefits if we're going to stay on our current course. I had a brand new grandson very recently and I called Larry and asked him if he could compute what the net taxes would be for young Steven Charles's generation. Most of the generations represented in this room have paid between 32 and 36% of income and aggregate in that taxes. Larry kotlikoff estimated that my grandson's generation and your grandson generation would need to pay 82% of income in that taxes. If we're going to stay on the current course and in case you have trouble believing that number pick up the office of the management and budget annual budget report and I praise them for doing this they have an entire chapter on generational accounting. No, entitlements are driving this both historically and in the future. As recently as 1960 27% of the spending in the US budget was for entitlements by the year 2000. It'll be 60% and you ain't seen nothing yet. But looking back for those who think we're going to solve this problem by cutting the defense budget. I simply remind you that before the demographic bomb of The Next Century. The increase alone and entitlement spending in the last quarter century is 50% larger than the entire defense budget. Not if I'm obsessed perhaps it's irrational Obsession. Now when you hear numbers, like kotlikoff and others that I might share with you. I hear people saying they're impossible their unsustainable. They could never happen. Now the Nixon Administration we had a republican humorist herb Stein and I noticed some of your Democrats a republican humorous is the ultimate oxymoron. But herb used to say if something is unsustainable it tends to stop. Not if you don't like that, there's another one which says if your horse dies we suggest you dismount. Now a great deal of these unsustainable numbers are driven by demographic realities that are already happened or very much in view. I spoke recently do a bunch of high school kids in Nebraska my home state and I suggested that they look out over the horizon of their careers. So let me share you some of the numbers that I gave them. If you look over the next 50 years, it is currently estimated that we will add to our population somewhere between 40 and 46 million. Americans over the age of 65 that is equivalent to another California + all of New England. You if you was and look at the old old generation over 85 you begin to see the real dimensions of a demographic explosion the official government estimates say that that group is going to grow not by a hundred and twenty-five 245% likely General seniors over 65, but by somewhere between 275 and 300 + 75% Under one of the official government scenarios. My grandson will live in an era where there are more Americans over the age of 25 then children under the age of 5. And in my lifetime there were once 22 children under the age of 5 for every American over the age of 85. Well into my grandson's working career, this country will look like a nation of Florida's. But the working population the taxpayers who have to pay the taxes is expected to grow only by 15 to 25% So the implication is is it may be unsustainable but it's irrefutable. The ratio of taxpayers for workers is going to change profoundly in 1950 of a 16 1/2 workers per retiree in 1993. 3.2 workers per retiree by the year 2040 as few as two workers for every 3 retiree. Now when you confront the payroll tax implications of this you here in Washington, some nervous giggles and some so-called humor. For example, it has been proposed that what we ought to do is Xanax, Mexico. Another proposition is why don't we go China One better and instead of limiting the number of children require everyone to have four children and that'll take care of the problem. Now the payroll tax rate as estimated currently depending on this scenario for Social Security and Medicare alone is a staggering 38 to 52% of pay. How do we sync our children can Will should pay taxes at that level? I think the answer is obviously know there's another Melancholy statistic that that perhaps out of depress you into a new terminal Melancholia. There's a set of numbers in the official government figures call unfunded liabilities. These are liabilities for promises. We have made two Americans for which we have not currently provided the taxes. Everybody is shocked with alarm at four and a half trillion dollars of public debt that is on the books what the American people are not being told is 14 trillion dollars of unfunded liabilities that are not currently on the books. But of course are part of the reason that you are going to pay high taxes in the future. Foot Spa is not in short supply in Washington. Neither is hypocrisy you might be interested to have read recently that the Congress viewed with alarm which ought to be enough to terrify all of us. That the unfunded pension for the private sector of America under Arisa rules had risen a stunning 9 billion dollars to a total of 58 billion and the congressman viewed with alarm and made speeches to the effect that we had better fun those pensions and 15 years instead of 30 what they neglected to tell you was that the unfunded liabilities for federal pensions, including Congressional pensions. We're 25 times higher than that number 1.1 trillion / many fewer workers. And if these rather hypocritical gentleman where to apply the same Arista standards to their own pensions as they require those of us in the private sector namely 30-year fund it would add 100 billion dollars a year nearly to the federal budget deficit. I was getting all this money all this entitlement money. Ronald Reagan, and we try to be bipartisan our group. So we attack both parties equally Ronald Reagan at times conveyed the impression that the problem was the Unworthy poor and if somehow we got rid of these vodka drinking mink Waring welfare Queens driving Cadillacs, we could solve the budget problem. Bill Clinton took another attack. He scape go to the rich and if we could just attacked these Wall Street fat cats like me and others some of you in this room and get them to pay higher income taxes, or we could solve the problem with them. The trouble with both of these Solutions is that they avoid the so-called Willie Sutton Factor. That's now well known that when asked why he robbed banks. She said that's where the money is. The money I'm I'm sorry to tell you is neither at those making over 200,000. We're only receiving 5 billion dollars of direct entitlement benefits are largely among the poor. It's the broad middle-class that's getting a lot of these benefits namely many of you in this room. For example, I had to research people calculate how much was going of entitlements and tax expenditures two people above the median income. 375 billion dollars a year in 1993 goes to people above the median income. Now there are Humane and gradual solutions to this problem. But there is no free lunch for any of us and the biggest third rail in American politics. Today is the illusion that we can solve this serious problem without involving the broad Meadow class. There is no solution to this problem that those in the middle class cannot participate in the solutions incidentally are not terribly difficult. We should obviously increase the retirement age because before long were livid will be living six years longer than we did at age 65, is it the time Social Security was put into effect. We should obviously taxed as income instead of having it largely tax-free. If someone can explain to me. Why an elderly person making the median income should pay 1/8 the taxes that a young worker does at the same income? I would like to hear the rationale for that. If not on fiscal grounds on moral grounds, and finally, I believe we should have something I called and have fluids test not a means test but an affluence test and I advocate that everybody above the median income. in all government entitlement programs should participate not just Social Security retirees, but Federal pensioners veterans farmers and so forth and I'm old enough to remember the second world war and I can tell you But that's one of the last time so I can remember when we were all agreed on the goal. And we all felt we shared in at equally and if we're not willing to involve everybody and people start saying why not him or why not her. I do not think we're going to have a politically acceptable solution. Let me talk a little bit about health care, which is the new entitlement program. I would praise the present for at least putting it on the agenda. I think he's right rhetorically to say that we should control healthcare costs as an essential precondition, but I think there is a very large gap between that rhetoric and what in fact is being proposed. This is a plan that is modeled against some pretty generous programs. It involves a whole bunch of new entitlements. I don't have the time to delve that all deeply into this newest category, but let me just say this. Are in an article it'll be coming out of Newsweek this next week. I have gathered the data on the comparison between the health care cost estimates of every major Healthcare entitlements versus the reality you in business would go broke if you were making estimates that were that wildly wrong and that wildly optimistic. And rather than get to deadly serious about this. Let me tell you another little joke. I asked Warren Rudman Eco charm of the Concord Coalition on God's Earth. We could add 5 new healthcare entitlements as the president proposed and and fund it with a cigarette tax Sid Peterson. I thought you were smarter than that. The answer is obvious. We require everybody to smoke. He said that way the cigarette revenues will be much higher people will die much earlier and I'm going to have to pay out this early retirement Health Care provision of the Clinton plan. Now the Congress is telling us lately, but rather than putting in Costas incentives up front so that we can cut back this already unsustainable gargantuan demand for healthcare in this country. They're telling us that if later cost to use their phrase are not deficit-neutral by which they mean if they don't already make an already unsustainable situation even more unsustainable, they will have done their job and when we asked them but what a future costs are as they have always been much much higher than anything that's been estimated. What are you going to do then? They then tell us that they will monitor quote-unquote the situation and then they will cut the benefits after the fact. Now you and I are to believe that the same Congress who could barely steel themselves to cut the honey bee subsidy is going to crash into our doctor's office and tell him what benefits are going to be eliminated after the fact if you believe that the Blackstone Group has at least six Brooklyn Bridge as we would be happy to sell you. There are many iron laws of entitlements but one of them is that once you promised a benefit it is very difficult to resend it. Ladies and gentlemen, I argue on this car. It's time we unlearn our entitlement that they can relearn our endowment ethic finally just a few words about the political imperative. I'm often asked. Is there anything other than a fiscal cardiac arrest in the Intensive Care Unit X and motivate Americans to do anything about it. I've been at this about 10 years now and it had a lot of scars to demonstrate how difficult it is. I will never forget the early 1980s when I was appalled to discover. That we index the tax system, which is a perfectly sensible idea on the income side, but we did nothing to cut the spending on the cost of living allowance of side and it struck me is a perfect time to cut these colors which have the added a hundred billion dollars a year a year in the last 10 years. So I went to enhance who was the sponsor of the hands Carnival bill and I said Congressman you have this reputation of being a fiscal conservative. How could this have happened? Why didn't you do something about the cost-of-living allowances on all these pensions and Social Security? The congressman push the button said to his assistant. Could you bring into mr. Peterson all the letters and wires and cause we have from the federal pensioners and Military pensioners are social security retirees on and on opposing any change in the hundred percent cost-of-living allowances, which of course is all of you in the private sector know are nowhere to be found in the private sector. The system says we're Congressman. You mean all of them? And this is just bringing some of them and there before my eyes is assistant walking in with this total arm full of letters wires calls, you know from the AARP from the military pensioners and so for protesting any change now, he said I wonder if you could bring into mr. Peterson. All of the letters and wires from people proposing what he's proposing namely a cut on the spending side on the cost-of-living side and the assistant said we'll Congressman. We don't ever get any letters like that. Now whatever you may think about your Congressman, they can count they can count votes. They can count letters and they can certainly count dollars. The point is that until this basic equation changes until there's a Grassroots effort and until they start hearing in large numbers by people like you are then the problem isn't going to change and that's basically why we set up the Concord coalition. I was intelligent enough to at least understand that we not only needed a Grassroots organization, but we did not need was an investment banker with negative Charisma to be heading to Sanford publicly and I was looking for two from political life a Republican and a Democrat. I had a very good friend who is a knee-jerk Democrat who has never seen a republican that he really likes who was watching a Warren Rudman the night he retired from the Senate. And he was obviously a maze and he said my God there is the ultimate oxymoron. A compassionate fair-minded Republican. I didn't know there were any why don't you get him? I have been very impressed with what Paul Tsongas it done. He proposed capping entitlements. He talked about a gasoline tax. He got 27% of the vote in a liberal State like New York, even though he had withdrawn and while we were wise enough to know that there's not a majority. There is a growing body out there that is concerned about this future Rodman refers to him as the only Greek washed in America, but the two of them in Vive you are quite a quite a pair. We now have a hundred chapters a couple hundred thousand members. I'm immensely grateful to 3M and Pantera and Echo labs and Congressman Tenpenny who is going to devote a lot of his life to this effort. And there is a little encouragement. The balanced budget amendment got pretty close. The president hasn't put out an entitlement reform commission Senator Bob Kerrey who chairs it and Jack Danforth from Missouri who co-chairs that I introduced by the other day. I was Indiscreet enough to say that this great veteran is going to have to have purple heart bravery to handle the political bullets and grenades that are going to be hurled at him. He's got a good sense of humor and Bob Kerrey who is you know was severely wounded in the Vietnam War said, well, it's pretty clear. I didn't dodge the bullets in the last war. Young people I was talking to your dad Senate Governor hear about young people. There's some encouraging signs on that front. We are after all talking about their future. And I've been talking recently to some commencement groups and I use the old ignorance and apathy joke to characterize their participation in the American political process. You recall that old joke with a philosophy professor says to the group which is worse ignorance or apathy and a kid from the back of the class says, I don't know and I don't care. So I say to these kids that roughly describes your involvement in your own future politically. I've suggested to them that they need to have two careers a private career in a public career. A public career isn't involved committed Citizen and I say to him I would make three suggestions to you first get the facts get yourself informed and if you get the facts, I think you'll become far more concerned than you are now. Have second have what we call in the Diplomatic World a Frank and constructive exchange is the euphemism with your parents and grandparents. Most of whom are not greedy old geezers. There's simply uninformed or misinformed and third get yourself involved in the political process join the Concord Coalition. We're setting up young people's organization. We're supporting the third millennium, which I understand has a chapter here leader leave and the young people are beginning to get involved. I told the lieutenant governor. I predicted in 10 years the political equation America's going to change as the young people fully grasp what we're talking about here, but we're talking about bluntly is slipping them the hidden check for our free lunch and they're going to get it. Let me close on this note. I was presumably educator University of Chicago. A Nobel Prize winner their name George Stiegler once said if you have no alternative you have no problem. I thought about that going through life. It's a very sobering thought but it's an important one. What is the alternative? Is the alternative to pass on to the Future unaffordable crushing debt is the alternative unsustainable Unthinkable taxes? Is the alternative perhaps something even more Unthinkable what Paul Tsongas calls and intergenerational War? Are any of these Alternatives? I asked you and I say no, so I have no problem plugging away, and I hope you don't either. Thank you very much. Thank you. Mr. Peterson. You're listening to Pete Peterson the president of the Concord Coalition in the former Secretary of Commerce speaking to members of the greater Minneapolis Chamber of Commerce the Concord Coalition in the Minnesota meeting on the stations in Minnesota Public Radio have a first question for you Pete from Andy Lindberg who's the director of public policy at Honeywell. Thank you. You are you open your talk by saying that the reason that you got interested in. This was the need to invest more and do as we need to raise productivity, which means we need to invest more which means that we need to spend last I thought about how business finances investment know sometimes from internal sources, but they're also allowed raising stock issues going out and borrowing money. Is there anything that in your mind qualifies as Government investment or is all government spending just water down the down to two. That's a good question incidentally. There's very important distinction to be made on borrowing that is sometimes lost. I think as we all know in our private lives. There is borrowing to invest and borrowing for consumption. This country is many of you know better than I and the beginning of the twentieth century borrowed a lot of money to invest in railroads and in production and in Steam Mills a steel mill. Within two decades, we had paid back all this debt because they added growth and productivity provided the revenue to do it. The thing that makes the government that's so alarming to me now. Is almost none of it has anything to do with investment virtually. All of it is for past consumption when old fogies like me get benefits. We don't need the Lord knows I don't need him and I don't think many of you need them which is why on this half loans test. I'm talking about its steeply Progressive the fat cats are this world like me would give up 75% of their benefits those only slightly above the median income might give up 4% of their benefits, but because there are so many more people in the middle class. They have to participate So I want to be sure I make the distinction between borrowing to invest in borrowing to consume. Secondly. I think there are few areas. Not many but a few. Where University of Chicago, you know, Adam Smith was our patron saint and he used to talk about comparative advantage and division of labor. There are a few things not many that the government can do that. The private sector is unlikely to do not nearly as many of these massive jobs programs that people talk about but I'll give you three examples. The first is basic research. One of the troubling things about entitlement spending. Is it crowding out some of the few things that the government oughta be supporting and basic research is a very important aspect of why this country was strong. There are certain kinds of infrastructure that it will be difficult to find at least full fan dancing in the private sector. I for one am appalled to go to Japan which I do and find out that on there trains are moving at a hundred 35 miles an hour and ours are clacking along at 60 and on their trains, you can write and work and phone and in our cars are lucky not to be developed a case of palsy in the course of it. And finally, I was very much interested that a group of businessmen the committee for economic development took a look at what were America's most serious problems long-term and concluded that the quality of the workforce was perhaps the single most important competitive this problem in America and they concluded that the Staggering percentage of young underclass children. Who don't have child care who don't have any immunization who don't have Head Start. I was about to say who don't see Sesame Street often enough. But my wife is a the founder of Sesame Street in the mother of big bird that might be too much of a commercial butt. They they said that they thought the best investment that this country could make what was to invest more in underclass children in a variety of ways. They came up with a program that would cost us 10 billion dollars. We are funding like 20% of that at best. When asked why we aren't doing that we're told we can't afford it. The cost of living allowances in a low inflation year amount to 12 billion dollars a year so we can afford to give people 100% cost of living alone as much of a going to people who don't need it. But we can't seem to find much money for basic research. We can't find much money for Investments that do matter. So my answer your question is there are a few areas very few that I think the public sector is likely to do that. The private sector is not likely to do but until we cut back on government subsidized consumption. We won't even have the money for those fewer. Thank you very much. Mr. Peterson. We have a question now from Robert White who writes a column to the Minneapolis Star Tribune. I'd like to get to a response to a problem that I see Pete and in what you been saying there's this damn needy again. The damn ex Commerce Secretary, that's the problem. I hope you didn't tell me there any of these people here. The problem doesn't have to do with this agreement with what you said more has to do with the emphasis on entitlements in the reason that I think of lots of us stand up and applaud anytime. Somebody talks about cut entitlement reform is the that seems to apply to them not to us either with your talk about pensions and federal pensions. And so on you mentioned a couple of times but did not really emphasized tax expenditure. Yes, and that's a big question and it seems to me that a little bit more emphasis on that might bring home the problem of the middle class which is all of us, but you're obviously into being nice media person. I that's a that's really an oxymoron if Story 2 There are two major tax expenditures was generally speaking. I don't like very much because they're off the books and we're not aware of them and I'll end up offending all of you before I get done with this I can assure you. We give American corporation 75 billion dollars a year for an unlimited tax exemption for health care. That means that firms like the Blackstone Group and I'm almost ashamed to admit this. Take the following position the government's paying for half of this. Why don't we just give people a real Rich Healthcare program? It's tax-free to them and we write off the taxes I argue that is one of the reasons that this country is spending 14% of the GNP rather than 8 because we have very few to man constraint. And I would argue further but in the same way that the Reaganomics was a kind of a supply-side fantasy, you know that you could have big cuts and taxes and leave spending alone and somehow balanced budgets. We're now going through a demand-side fantasy on health care that all we can do is add new benefits and not eliminate the disincentives to demand and somehow cost for going to come down that isn't the way I learned it the universe Chicago. So I would put a serious cap on health care tax exemptions and I think when employees start an understanding but above some minimum program if they got the benefits they get taxed on them like ordinary income. It would start making a difference. No, I've offended every Healthcare organization in the room. So now I can take on the real estate Lobby. right after the second world war this country had a very special problem at the rest of the world did not have our plants were in huge productivity as you know, Are they were largely untouched the rest of the world was an ashes and the fundamental macroeconomic problem was to stimulate demand. So we set up a tax system in this country in my view to discourage savings. You remember we used to have the biggest on earned tax of all was on so-called unearned income rest of the world. Thought we were crazy. They said you mean you're going to penalize people for savings. We think it's hard work to save and among the things we did was to create a special category for housing and your recall all the things we did. We made mortgage interest deductible. We guaranteed Federal loans and had very small, you know Equity requirements. We had special capital gains treatment and so forth and the concept was that if we build a lot of houses, it would require a lot of appliances and other stuff and it would stimulate demand space the fact that a certain point in American economic history. This may have been appropriate policy, but we now find ourselves in situations where we ought to be encouraging productive investment that increases productivity and we are the only country in the world. The treats mortgage interest the way we do. And we think it's a great sacrifice. The people like me can have a million-dollar apartment and take a full deduction on it. I think that's the second big tax expenditure. We ought to be looking at and on my plan. I lower that threshold. To $250,000. I guess the reason I don't move it off totally as I'm a coward. I don't know but I think those are two tax expenditures that if you're really serious involve immense amounts of money and give the market some very perverse incentives on the one hand to demand too much health care and on the other hand to divert a lot of our savings not into productive investment, but in the residential land and office construction, thank you for the questions. Thank you for the answer to hear from Andi Moss who's with City business, which is a weekly business publication in one of the sponsors of today's meeting. Thank you you address both what I would turn my generation and the apathetic state that we are in some of the people that are younger than myself in high school and college as well as the retirees who I would turn my grandparents generation and their inability to give up or sacrifice some of their entitlements to my question is how do you and the Concord Coalition proposed to unite both of those parties towards reaching some of these economic goals? I guess I'm looking at you pal as Ronald Reagan used to say when are you going to start getting involved and you can your own dialogue? Let me be sure that I repeat something. It's very important. I don't believe that most parents and grandparents are greedy geezers who don't care about their kids or don't care about their future. I think they have been LED down a fiscal Primrose path with all kinds of myths. My father went to his grave believing. That I'm Social Security because he had been told there was an account that it was much like his local savings account. And all he was doing was getting back his money. And in his later years, he wasn't really able to comprehend my kind of probably overly complex reasoning but I tried to explain unsuccessfully that there was no account in the first place in the second place the money at already been spent in the third-place. He was getting many times back, but he'd put in plus interest now as long as the elderly believe that all they're doing is getting back their money. We can't we can't be too critical of the so it is extraordinary really important that we start getting the facts out there at the present time the average retiree. Get something like three to five times what they put in but their companies put in plus interest that's on Social Security. On Medicare they get about 20 times what they put in tax free. Now it is extraordinary really important that they understand those facts because they're wise enough to understand but if everybody's on the wagon it leaves unanswered the awkward question of who's going to pull it. And the answer that is you now, some of you may have seen one or two of you. So up the 60 Minutes show. And we were discussing it at lunch and which Leslie saw gave me a formidable assignment say I'm willing to do a thing on your book. If you will confront the elderly. Fairly formidable I put on my you know my vest to bulletproof and thought I went. I show the hourly big pictures of my grandchildren and I gave them equal time cuz I said that's really what this is all about the future. We went through the various myths, you know about how they were getting back their money and insofar. Two things happened the change the minds of those people first. Was a clear goal. The Concord Coalition set a goal of balancing the budget for the Year 2005 and we do that. The first place the American people understand what a balanced budget is they don't understand what 2.67% of the GNP is but they do understand. What a balanced budget is. That's your pass it on to their kids. If John Kennedy in 1963 had said we're going to send some people off into space. We don't quite know where they're going, but they're going to come back. That's one thing. But when he said by the end of this decade, we're going to send a man to the moon and he's going to return to Earth safely everybody understood that so the Concord Coalition and I believe it's important to have a goal. The second thing because the elderly are like millions of other Americans deeply cynical about Washington. They don't want to give up their benefits only to find out they're spending it on some other cockamamie program. They want to be sure the bottom line is handled if they're going to participate the second thing that moved them I found because at the end of this meeting Wesley took a vote and much to her Donna Schmidt eighty-five 90% of the elderly voted for this program. The minute they heard that it wasn't just the elderly but it was everybody and fat cat Peterson was giving up a lot of his benefits and the farmers were involved in the veterans were involved in Lord knows the congressmen were involved. I've told Senator Kerry and set it in for that if the American people understood fully the lavishness of federal pensions, which are roughly two and a half to three times what we find in the private sector and that if 1.1 trillion is off the book somewhere. Do you would really have a revolution? So I think the minute the elderly understand a what the facts are be that it's a fair program and it isn't going to Cripple, you know, some destitute poor person who's below the poverty and finally that were all in it together. I think that'll make a difference. But I'm looking at you pal. I'm saying up to now most people in your generation have not inform themselves. I gave the commencement address University of Rochester. I said you're a bunch of nda's and I would bet that the high percentage of you people don't know what the projected payroll taxes that you're going to have to pay and most of my grade. You've got to have a dialogue with your parents and grandparents and then you've got to get actively involved and I think that combination plus a fair program with universal burden-sharing the way we had a second world war might make a difference. Now the AARP doesn't agree with me. Okay. I told somebody I'm number one on their Hit List, you know and I'm seeing if I could get assassinated and Warren Rodman and Paul Tsongas, you know quietly may be an option that some might consider but so that you young people get this message. They have 33 million members. There are more members in that organization. Then there are citizens in Canada. They are now out there running TV ads in the face of this extraordinary experience. We've had with healthcare costs. And if you get Newsweek next week, you'll be appalled at how much more new entitlement health benefits of cost than we estimated. And in the face of that they are saying we not only need Universal coverage, but we need long-term care prescription drugs mental health and so forth. So you have to counteract that. We're trying our limited way, but you the young people have to come direct it. Sorry for the sermon.