NEW YORK (Reuters) – Warren Buffett, the billionaire co-founder of a top private equity firm and a prominent voice for U.S. fiscal responsibility, called on the United States and its elected officials to combat the nation's fast-growing, multi-trillion dollar debt load.
Buffett, Blackstone Group LP co-founder Peter Peterson, and former Comptroller General David Walker were part of a panel that spoke Thursday night in Omaha, Nebraska following the national premiere of the documentary “I.O.U.S.A.” The talk was simulcast in more than 350 movie theatres.
The film argues the country might face economic disaster if it can't find a way to pay some $53 trillion it has committed to spend — and doesn't have now — as the population ages, and Medicare and Social Security costs soar.
It also argues, and panelists agreed, that the United States has become too dependent on foreign investors to buy its goods and its publicly-issued debt. There was also agreement that many politicians fear making tough policy choices that have ramifications far beyond the current election cycle.
“Our politics have become so embedded and so partisan, with so many special interests, that they require a massive effort from the public telling them, 'we want something done',” Peterson said.
Buffett, who runs Omaha-based Berkshire Hathaway Inc and turns 78 on Aug 30, was more sanguine than other panelists, though he said he doesn't want debt to grow as a percentage of gross domestic product.
“The prospects of being born in the United States are still better than being born anyplace else in the world,” Buffett said.
Buffett, the world's richest person according to Forbes magazine, added: “It has not paid to sell America short since 1776, and the time to start is not in 2008.”
He added that even if there are more debts to cover, the United States will have greater resources to pay them. “The pie gets larger over time,” he said.
Another panelist was Bill Novelli, chief executive of the AARP advocacy group for people 50 and older, who called for bringing health care inflation under control. A fifth was William Niskanen, chairman of the libertarian Cato Institute, who said the nation's retirement age should rise to 70.
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Roughly four-fifths of the $53 trillion figure is related to projected shortfalls in Medicare and Social Security.
Most of the rest is what is commonly called the “national debt,” which in July totaled nearly $9.6 trillion, according to the U.S. Treasury Department's Bureau of Public Debt.
Walker as comptroller general ran Congress' Government Accountability Office from 1998 until this March. He said aggressive action is needed by whoever becomes the next president, likely either John McCain or Barack Obama.
Now running the Peter G. Peterson Foundation, Walker called for the creation of a “capable, credible and bipartisan” commission to make recommendations to ensure tough budget controls, comprehensive Social Security reforms that will last indefinitely, and “round one” of health care and tax reform.
“What we have to do is to recognize and reward elected officials — Democrats, Republicans, independents, whatever — who tell the truth and who stand up and try to help make tough choices sooner rather than later to make sure that America's future is better than its past, and reject the B.S. and the nothing types of solutions and platitudes that we hear from so many politicians today,” he said.
Peterson added that the United States should consider the “provocative” notion of mandatory savings for individuals, as have some other countries, saying the nation had become “so consumption-obsessed and so borrowing-obsessed.”
The 82-year-old Peterson is also a former chief executive of Lehman Brothers and former U.S. secretary of commerce under President Richard Nixon.
By Jonathan Stempel
(Editing by Kim Coghill)