Magazine article The CPA Journal

Book Review: Facing Up

Magazine article The CPA Journal

Book Review: Facing Up

Article excerpt

By Peter G. Peterson. Published by Simon and Schuster, 411 pages, $22.95.

If your view of Congress and its annual budget wrangling reminds you of Titanic passengers arguing about deck chairs, then Pete Peterson's book is for you. It sets forth in clear and convincing terms what every CPA knows by heart: You can't spend more than your income for very long without courting disaster.

Pete Peterson is a former Secretary of Commerce under Nixon, former CEO of Bell and Howell and Lehman Brothers, and present chairman of The Blackstone Group, a venture capital company that he co-founded. Peterson makes the reader "face up" to the harsh reality of the crushing legacy of debt that we are passing to our children, its root causes, and the consequences that will result.

The continuing overindulgence of entitlement for all must stop. Our eyes glaze over when we are asked to sacrifice for the future and greater good. To paraphrase Peterson, "Everyone is on the bandwagon and no one is left to pull." He calls the budgets of the last 20 years a vast Ponzi scheme of intergenerational transfers" with our children and grandchildren the ultimate victims. The entitlements that he points to are those most dear to us: Social Security and its wicked stepchild the COLA, farm subsidies, mortgage interest and health care premium deductions, cheap energy, Medicare, and the possibility of universal health care coverage. Ronald Reagan wanted us to think the poor were draining us, and Bill Clinton wants to soak the rich as a solution.

However, neither the rich nor the poor are large enough groups to solve the real problem. …

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