Tesi Robert E. Rubin, Segretario al Tesoro 1995-99,
CdA Citigroup:
squilibri accumulati (deficit
bilancio – inclusi deficit pensionistico e sanitario – e deficit estero) stanno
raggiungendo dimensioni tali da mettere a rischio l’economia USA;
provvedimenti di aggiustamento necessari sono tanto
pesanti da essere politicamente insostenibili per qualunque partito al
governo:
necessario accordo bipartisan
per aumento tasse e tagli.
- Necessario ridurre deficit bilancio che marcia sui 4-5
trilioni di $ nei prossimi dieci anni, aumentando tasse e tagliando spese; - affrontare il problema dei crescenti impegni
pensionistici e soprattutto sanitari, che esploderanno con il pensionamento
dei baby boomers – fare riforma sanitaria. - Necessari investimenti infrastrutturali, potenziare istruzione
pubblica, e favorire le ristrutturazioni con misure a favore di chi
viene espulso dalle aziende (evitando l’assistenzialismo generalizzato
eurocontinentale) per aumentare la produttività. - Salari e
reddito familiare medio sono cresciuti poco negli ultimi 30 anni, tranne
secondo quinquennio anni ’90; - ineguaglianze dei redditi aumentate: reddito dell’1
per mille più ricco nel 1979 era pari a 44 volte il reddito medio della
metà inferiore della popolazione; nel 2001 era salito a 160 volte (tesi
che un certo benessere si traduce in maggiore produttività). - Ė vero che la crescita della produzione degli ultimi anni è
stata significativa, ma:- è stata il risultato di politica monetaria
espansiva e di crescita consumi a credito; - ma sta producendo scarso aumento dell’occupazione, e
- ha portato all’accumularsi di squilibri, deficit pubblico
e deficit estero (6% PIL, in parte dovuto al primo). Alla lunga, alti deficit
pubblici prosciugano l’investimento privato, aumentano i tassi di interesse e
riducono produttività e crescita. Finora i deficit sono stati appianati dal
forte afflusso di capitali esteri (banche centrali che comprano dollari per
sostenere il dollaro e favorire il
proprio export), ma se si perde la fiducia nel $ tutto potrebbe saltare
(quando non si sa). - gli aumenti delle tasse degli anni ’90,
contrariamente alle previsioni catastrofiche dei supply-siders, portarono la
più lunga espansione della storia USA
- è stata il risultato di politica monetaria
By ROBERT E. RUBIN
January 24, 2006; Page A20
As I talk to public and private sector
leaders from around the world, I am repeatedly struck by the powerful sense of
mission held by the leaders of Asia’s emerging market economies. They are
making tough decisions to effectively promote competitiveness and growth. The
result is large numbers of well-educated workers in low-wage and increasingly
market-based environments (especially in China and India), connected to the
U.S. by modern transportation and real time communications. This has created a
competitive challenge of historic proportions which encompasses
manufacturing and virtually all services electronically communicable.
We can meet this challenge and enjoy a bright
future. Our economy has great strengths — most particularly its long history
of a true market-based structure, flexibility, relative openness to trade and
immigration, and sheer size. These strengths can be especially beneficial when
rapid technological development and continued global integration reward
economies that are adaptable — and punish those that are not. However, to reap
those rewards, and to avoid the real possibility of great economic difficulty,
we must re-establish our own seriousness of purpose about economic policy, and we
must change policy direction on many fronts.
Stick With the Status Quo?
Some would argue that our reasonably
healthy GDP growth in the last few years — driven largely by the Federal
Reserve Board’s accommodative monetary policy and the disposition of consumers
to spend based on high housing prices and lower interest rates — indicates
that we can stick with the economic policy status quo. I believe this would be
a serious mistake. Median real wages and median family incomes have been
roughly stagnant for the past five years — and many Americans have had
falling real incomes. Private sector job growth has been the lowest of any
recovery since the ’30s. Most importantly, the longer-term underpinnings of
our economy are unsound at a time of historic competitive change in the global
economy.
Re-establishing seriousness of purpose
regarding economic policy and acting to meet the challenges of our era will
require our political system to do what it is not doing today: making choices
that are very difficult politically, compromising among divergent views in
order to reach common ground, and putting aside ideology in favor of facts and
analysis. There is almost surely widespread agreement that our future
economic well-being is threatened by large current and projected fiscal
deficits, huge increases in entitlement costs beginning in the next decade,
personal savings rates of approximately zero, public school system
inadequacies, and high health care costs. But our political system is failing
to mediate differing views on how to address these issues, and failing to
make the difficult decisions required. Political leaders in the recent past
have taken on critically important economic issues, as President Clinton did on
deficit reduction, trade liberalization and global economic crises, and as
Ronald Reagan and Tip O’Neill did on Social Security in 1983. The need to do so
now is imperative.
To move forward, serious policy advocates
from all perspectives should start by agreeing on two basic bedrock principles:
that there is no free lunch; and that a strong future requires incurring costs
now for benefits later. We should then put everything on the table. Our
strategy should have four components:
(1) We should re-establish sound fiscal
conditions for the intermediate term (the 10-year federal budget window)
and put in place a real plan to get entitlements on a sound footing for the
long term. (2) We need a strong public investment program — paid for,
not funded by increased public borrowing — to promote productivity growth,
to help those dislocated by technology and trade, and to equip all citizens to
share in our economic well-being and growth. (3) We must pursue an
international economic policy that continues global integration, especially
multilaterally, and proactively addresses our other international economic
interests, including combating global poverty. (4) We should work toward a
regulatory regime that meets our needs and sensibly weigh risks and rewards.
Our strategy should reaffirm market-based
economics as the most effective organizing principle for economic activity,
while recognizing the critical role of government in providing the many requisites
for economic success that markets, by their very nature, will not provide.
Broad participation in economic well-being
and growth is critical, both as a fundamental value and to realize our economic
potential. Enabling all citizens to obtain adequate housing, nutrition,
education, health care and much else will best promote productivity.
Broad-based participation is also the best antidote to protectionism, and to
pressures for undue restrictions on our economic flexibility and immigration.
For these same reasons, measures to increase security for the growing number
of people dislocated in our rapidly changing economy may well be wise
economically. This can be done without creating the rigidities and excessive
social benefits that have led to chronically slow growth and high
unemployment in Continental Europe.
The seeming inertial tendency of our economy
toward less and less broad-based participation is startling and too little
discussed. Median real wages, household incomes and family incomes have increased
relatively little over the last 30 years, except during the last five years of
the ’90s. Thus, a study showed that in 1979 it took 44 people with average
earnings in the bottom half of the population to equal each person in the top
0.1 of 1%, while in 2001, the last year in that study, that number was 160.
Our economy is not working for too many of our people, and that is a problem
for all of us.
Turning, then, to the first component of a
sound economic strategy — fiscal conditions and entitlements — most
mainstream forecasters are now predicting a 10-year deficit of $4 trillion
to $5 trillion, if the 2001 and 2003 tax cuts are made permanent, and
assuming AMT [Alternative Minimum Tax –ndt] reform. The 2001 and 2003 tax
cuts, on the same assumption of permanence, have a 10-year cost of $4 trillion,
or 80% of the projected deficit, based on estimates from the Congressional
Budget Office. Business Week was quoted as saying that "the deficit morass
is due as much to a revenue shortfall as excessive spending." The
unexpected increase in tax revenues that occurred last year has been estimated
by the CBO as temporary, and in any case would make a relatively small dent
even if it were to continue for the whole 10 years. Free lunches are
politically appealing, but economically unrealistic.
* * *
The proponents of supply-side theory who
assert that tax cuts will wholly — or even significantly — pay for themselves
(through increased growth and federal tax revenues), appear to be no more
accurate now than they were in the ’90s. Then, they argued that tax
increases included in our plan to address fiscal deficits were likely to
lead to massive job loss, but what followed instead was the longest economic
expansion in our history. Moreover, while 10-year fiscal deficit
projections are inevitably unreliable, these forecasts could just as readily
turn out to be low as to be high. What actually happens will always involve
factors cutting both ways — the unexpected costs for Katrina and unbudgeted
costs for Iraq and Afghanistan are already projected to exceed the unexpected
tax revenues.
Furthermore, by the middle of the next
decade, the rate of growth of entitlement spending will increase at a very
rapid pace because of increases in baby boomer retirements, with Medicare being
several times as great a fiscal problem as Social Security. The effects of
these fiscal conditions are exacerbated because they occur, uniquely in the
U.S. amongst the developed nations, in combination with a very low personal
savings rates, high levels of personal debt and enormous current account
deficits (currently in excess of 6% of GDP, and caused at least in part by
our fiscal deficits).
Virtually all mainstream economists take the
view that sustained long-term deficits will crowd out private investment,
increase interest rates, reduce productivity and reduce growth. And the far
greater danger is that these various imbalances could at some point lead to
fear of fiscal disarray and concern about our currency, causing sharply higher
interest rates in our bond markets and the risk of a sharp exchange-rate
decline. Also, very importantly, the evidence of the early ’90s strongly
suggests that sustained deficits can undermine business and consumer
confidence. The adverse impact on interest and currency rates has not yet
occurred, partly because business has had relatively low levels of demand for
capital — but most importantly because of vast capital inflows from abroad
(until recently, predominantly from central banks supporting the dollar to subsidize
their exports). This is not indefinitely sustainable; at some point, which
could be near in time or still some years out, continued imbalances, increasing
fiscal debt levels and ever-greater overweighting of dollar holdings abroad are
highly likely to lead to loss of confidence, and trouble.
The fiscal and entitlement holes are now
so deep that measures adequate to address them would be exceedingly difficult
politically, deterring elected officials from
unilaterally proposing them. And, even more importantly, the proposals
themselves would likely be so sharply attacked as to become politically toxic.
Thus, I believe that the most realistic way forward is for the president to
bring together the leaders of both parties and both houses to make these decisions
with joint political responsibility. Everything should be on the table,
including cost discipline, progress toward entitlement reform, and judgment
as to the revenues needed to close current deficits and provide the
functions the American people expect of government. These include public
investment in education, basic research, infrastructure and other
requisites for a successful economy as well as national security and the
entitlement costs of an aging population. Finding the balance that best promotes
economic growth in this context could well call for revenue increases as
well as spending discipline, as evidenced by the ’90s, when a mixture of
spending cuts and targeted tax increases was followed by years of strong
growth, powerful job creation and rising incomes. Moreover, any
revenue-increasing measures should reduce, not exacerbate, our growing income
gap.
Vested Interests, Constrained Options
As to public investment and other public
programs, too often vested interests have constrained our options, with an
adverse impact on our competitiveness we can no longer afford. In public
education, we should consider teacher performance metrics, modifying the
tenure system, different types of charter schools and much else. In basic
research, the Internet was invented in federal programs, and that dynamic
commitment should be revived, including focus on energy alternatives, energy
conservation and global warming, which could lead to new job-creating
industries. And we must move energetically forward in rebuilding our
infrastructure, equipping the poor to join the economic mainstream (with
great potential for reducing social costs and increasing productivity), and reforming
our health-care system.
As to global integration, while trade
liberalization is still the right path, we must deal with the problem that
those who support trade too often don’t support a powerful domestic agenda for
productivity and helping the dislocated, while those who support such
initiatives tend to be less likely to support trade liberalization.
Finally, regulation should provide
constraints where markets fail to reflect externalities, but those constraints
must be based on risk/reward calculations. Thus, effective environmental
protection should be recognized as a long-term economic imperative as well as a
value in itself, but restraint should be proportionate to the benefits, however
difficult measuring those benefits often is. Similarly, further tort reform
could strike a better balance between providing the ability to obtain redress
and generating costs that impede competitiveness. More generally, our objective
should not be to eliminate all risks, but rather to reduce risk to optimal
risk/reward levels.
None of this is easy, but our economy could
well be at a critical juncture for the longer term. To realize our bright
future and to minimize the risk of serious difficulty, we urgently need our own
sense of mission to meet the challenges facing our economy.
Mr. Rubin, U.S. Treasury Secretary from 1995
to 1999, is a director of Citigroup.