Experts Break Down Economy

Former Sen. Alan Simpson, White House economic adviser Jared Bernstein share their insights on the federal deficit and more at event hosted by Face the Facts USA.
SMPA Director Frank Sesno with former Sen. Alan Simpson and Jared Bernstein, former chief economist and economic adviser to Vice President Joe Biden, at an event for Face the Facts USA.
October 02, 2012

The United States is more than $16 trillion in debt. What does that mean, and are we going to fix it?

This debt and the federal deficit were among the topics of conversation Tuesday at “Election 2012 and America’s Fiscal Cliff,” a discussion with former Sen. Alan Simpson, R-Wyo., and Jared Bernstein, former chief economist and economic adviser to Vice President Joe Biden. The event was hosted by Face the Facts USA, a project of the George Washington School of Media and Public Affairs, and was taped for RLTV, to air Oct. 10. 

The discussion, moderated by Face the Facts co-founder and SMPA Director Frank Sesno, centered around what many polls reveal is the top concern of voters around the country—the economy. Face the Facts USA videos about the economy were also shown intermittently throughout the discussion.

The attendees included former Gov. Jim Douglas, R-Vt.; former U.S. Secretary of Agriculture Dan Glickman; and GW Board of Trustees members Robert Tanenbaum and Cynthia Steele Vance, B.A. ’79.

After welcoming remarks by President Steven Knapp, Mr. Sesno noted that information from Face the Facts USA has been picked up in publications around the country. A nonpartisan, multiplatform content hub and civic engagement initiative, Face the Facts USA helps voters become more informed on today’s most important topics using pop culture-themed digital videos, lively infographics and extensive social media. 

“George Washington University is involved in a civic engagement project that is going to be reaching millions of people,” he told the audience. “I think we can have a voice— this university can have a voice— in moving our democracy and the information that flows through it a little bit forward.”

The discussion began with Sen. Simpson, who co-chaired the 2010 National Commission of Fiscal Responsibility and Reform. The bipartisan debt commission recommended a six-part plan to reduce the federal deficit by nearly $4 trillion through 2020, with cuts and reforms in a number of areas, including defense, taxes and Social Security.

The issue is so important to Sen. Simpson that, at 81 years old, he still travels around the country to speak on fiscal reform and on the commission’s report. He told the audience that when it comes to the federal deficit, “everything should be put on the table”—and that honesty should begin with this election.

“When somebody comes up on their hind legs in this election and says, ‘I can get this done without touching precious Medicare, precious Medicaid, precious Social Security and precious defense,’ those people are fake, total phonies,” he said.

Temporary spending—which increases the deficit—is actually necessary to jumpstart a slow economy, noted Mr. Bernstein. The former executive director of the White House Task Force on the Middle Class told the audience that the real trouble lies in the spending that is never paid for, which places the country on an “unsustainable budget path.”

“We could do considerably more stimulus deficit spending right now if it was truly temporary,” he said. “The thing that is driving the deficit going forward is that, over the longer term, we are spending more than we are taking in.”

The experts also discussed the financial implications of cuts and reforms to Social Security, health care, defense spending and taxes.

As the discussion was on the eve of the first presidential debate, Mr. Sesno asked the guests what questions they would pose to President Barack Obama and Republican presidential candidate Mitt Romney.

Sen. Simpson, a member the Board of Directors for the Commission on Presidential Debates, said he wants the candidates to talk about how they will position the United States for the future, stating that citizens don’t understand how much trouble the country is in.

“We’re at 15.2 percent revenue to the GDP, and it’s usually 18 to 20. It’s madness,” said Sen. Simpson, noting the country currently has the least amount of revenue coming in since the Korean War.

Mr. Bernstein said he would ask Romney about how his tax reduction plan will affect the nation’s budget, while asking President Obama how he will bring down the unemployment rate.

Although the issues of the nation’s debt and federal deficit might not be solved during the next election, both guests agreed that citizens deserve to know exactly what’s happening.

“People are so sick and tired of BS and mush,” said Sen. Simpson, who estimated he’s talked to more than a half a million people around the country about fiscal reform since 2010. “They’re thirsting for truth, and somebody’s gotta tell them that.”

GW Research Blog