Warren Buffett: I could end the deficit in 5 minutes.

http://www.ritholtz.com/blog/2011/07/warren-buffett-i-could-end-the-deficit-in-5-minutes/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

by pitdesi • 15 years ago

434 180 15 years ago

ritholtz.com

mmcconnell1618• 15 years ago

The only problem is that the sitting congress would need to pass the law making themselves ineligible for re-election.

hugh3• 15 years ago

I assume it'd need to be a constitutional change rather than a legislative one, otherwise they could just rescind the law anyway.

Which reminds me of one of my biggest objections to the US constitution: constitutional amendments are done simply by getting a bunch of legislatures to agree to 'em, rather than by holding a referendum as in Australia.

sigzero• 15 years ago

I much prefer the US way.

learc83• 15 years ago

Well, we could have a constitutional convention.

hnsmurf2• 15 years ago

That wouldn't end the deficit, that would just ensure the deficit was 0 the day before elections. Also there's a slippery slope. This same logic, if we allow it to be applied to the deficit, could be applied to other things. No congressmen could be reelected if gay marriage is legal, etc.

seabee2• 15 years ago

That's a specious argument. Something like gay marriage is the result of writing a law; the deficit is an accumulation of many public spending programmes enacted under the law more often than by its creation.

This is basically a method of legislating a budget cap. Your 'slippery slope' argument in its correct analogy is no more than passing a law that outlaws gay marriage in the first place.

barrybe• 15 years ago

> That wouldn't end the deficit, that would just ensure the deficit was 0 the day before elections.

I think that's the point. Short-term borrowing is sometimes a smart idea, as long as there's a real plan to pay it off. The idea would be to only discourage irresponsible borrowing.

> This same logic, if we allow it to be applied to the deficit, could be applied to other things.

I think it's fairly uncontroversial that having unpaid debt is bad and should be avoided.. so it's not too similar to issues that are actually controversial.

praptak• 15 years ago

"This same logic, if we allow it to be applied to the deficit, could be applied to other things."

There are legitimate reasons to discern between the deficit and those other things. Most law systems are based on a small set of core values which are deliberately made hard to change, i.e. made part of the supreme law.

I believe that the (preventing of) deficit has the characteristics shared by those core values: there is a consensus that it is bad (especially in the long term) and yet there's strong temptation to create it for the short term benefits (buying votes.)

hnsmurf2• 15 years ago

I don't disagree with you, but a lot of people feel the same about marriage. A lot of people (not me, btw) feel that this is a Christian country and it's antithetical to our founders' beliefs for gays to marry and yadda yadda.

The point I'm making is that everyone has a different idea of what those core values are.

Robin_Message• 15 years ago

Would Warren Buffett fire the entire management of any company he owned that borrowed more than 10% of earnings in one year, regardless of circumstances? Because that is what his suggestion amounts to.

sc68cal2• 15 years ago

Firstly - I wouldn't put it past him to do something like that if he thought that would maximize his investment. The market doesn't view a debt of +10% of earnings to be that big of a deal however, has priced that risk accordingly, and Buffet has never been put in that situation.

Secondly - there is always a problem with equating governments to corporations, since governments are formed for public good and corporations are formed to maximize shareholder value. Their roles and motivations are quite different.

coconutrandom2• 15 years ago

Is it naive to suggest that citizens are shareholders? and to extend the metaphor, that other countries are customers/clients?

Brewer4• 15 years ago

I think the US government is one company that needs to have most of its management fired, or at least scared shitless.

It's not the best solution, but we really do need to do something.

nhaehnle4• 15 years ago

This does not address the question of whether a balanced budget is even desirable. Equating the budget of the currency issuer with the everyday experience of the budget of the currency user is a fallacy.

Looking at the respective balances of the three sectors of government, domestic private, and external, it is obvious that flows are conserved. Given net imports (i.e. more money flowing into the external sector than out of it), a balanced government budget can only occur if the private sector is in deficit, i.e. more money flowing out of the private sector than flowing into it.

Empirically, external balances change only very slowly, unless artificial trade barriers (tariffs etc.) are raised.

So in the end, the political choice is between deficits in the private sector, and deficits in the government sector (and of course a range of choices in-between).

kd0amg• 15 years ago

it is obvious that flows are conserved

Given that government can issue additional currency, conservation of flow doesn't seem particularly obvious to me.

nhaehnle4• 15 years ago

This is a flows vs. stock thing that I could have made clearer.

The additional currency that is issued by the government does not disappear in a black hole (with the possible exception that, technically, dollar bills do get lost in the wash). Instead, it either ultimately flows back to government, or ends up in one of the other sectors.

I think the relevant constraints are clear to everybody here, which is why I was not more explicit.

jpadkins• 15 years ago

What about the moral implications that deficit spending is inter-generational taxation? I think that is a clear case of taxation without representation.

wtvanhest2• 15 years ago

This will most likely be fixed with high inflation, but it is a concern.

nhaehnle4• 15 years ago

Inter-temporal taxation does not exist in any meaningful way. Future citizens do not send taxes to the present government. More importantly, when have you last consumed a good that was produced in the future? In real terms - and that is what ultimately matters - there is no transfer between different times (well, there is some amount of transfer from the past to the present, but this is usually not what people complain about ;)).

Now what you probably meant to say is this: The existence of the debt implies that in the future, there will be interest payments. Most likely (unless the Modern Monetary Theory revolution in education takes place before then), people in the future will be lead to believe that these interest payments come from tax payers.

This has potential moral implications because there is a tendency that those citizens who overwhelmingly receive the interest payments in the future are not the same as the ones who pay the taxes (also in the future). Absolutely. But this is more about equity and distribution than it is about the fact that there is a debt. I have also commented on this before: http://news.ycombinator.com/item?id=2730278

Edit: I have to correct myself. One could perhaps talk about some form of inter-temporal taxation in the context of using non-renewable natural resources. However, I personally think that it's still better to talk about that in terms of sustainability rather than taxation.

amalcon• 15 years ago

Well, post-Keynesian economics (the only school that even asks this question) seems to be underrepresented on the Internet to nearly the extent that the Austrian school is overrepresented.

I agree that it is silly (from a fundamental standpoint) to make such a big fuss over the federal budget deficit while completely ignoring the trade deficit, but I understand why people do it. If the powers that be were monolithic, it would be easy to fix the budget deficit. The trade deficit is more of an emergent property that people don't understand that well. Since in reality, it's all smoke and mirrors either way, I can see why people go with the easier story to tell.

chrismealy• 15 years ago

Also, private debt. The Great Depression and the recent global financial crisis were caused by an explosion of private debt. And nobody pays any attention at all to aggregate private debt.

wtvanhest2• 15 years ago

Capital flows between groups is an interesting way to look at it, but it doesn't consider efficiency of what money is used for, invested in, spent on.

You could have identical capital inflows and outflows (i.e. money coming in to the US from the international community) but it could be wasted on things it shouldn't.

3% of GDP is very reasonable unless extreme circumstances were present. In that case, politicians might just have to resign after their term.

rsbrown2• 15 years ago

Buffett wasn't suggesting we mandate a balanced budget, simply a cap on deficit spending proportional to the nation's GDP.

cheez6• 15 years ago

This line I see on the Internet with the excuse that government cannot go bankrupt is complete rubbish. This is what you are implying with differentiating the issuer with the user.

The only reason the US is able to print money is because it is a de facto world currency.

How many years do you think it takes to replace a de facto currency for international trade?

Not many. Russia and China are already trading in their own currencies instead of the USD. I'm sure Brazil wants to follow.

There are some political thinkers who theorize that the Libyan and Iraqi wars are meant to prop up the dollar. The Libyan dictator wants a gold-backed currency for Africa and Iraq and Iran want(ed) to trade in Euros. I think the Libyan connection is pretty far fetched but I am not in the know so who really knows?

If any of those transitions had happened 10 years ago, the USD would be severely diminished today, reducing the power of the US. Less countries would need the currency and I believe you would see even more real inflation.

So yes, the government of the US can effectively go bankrupt if no one wants the currency anymore.

And that includes its own people. It happened in the Great Depression because some people realized it was the money system that was a large cause of the depression.

The wild card? That the US actually embarks on the "Everyone must use USD or end up like those other guys" rampage.

For what it's worth, I hold a shitload of USD-denominated assets because I believe in the American system more than any other. But man, that belief being tested hard these days...

lhnn2• 15 years ago

It sounds absurd to me that you say the private sector MUST be losing money if the government has a balanced budget. That is absolute hogwash.

jcarreiro2• 15 years ago

If the government has a balanced budget, _and_ there is a trade deficit, then the private sector must be losing money -- otherwise, where is the money that is being transferred to the external sector coming from?

johnnyg• 15 years ago

A republic or democracy presupposes that the majority of representatives will get it right eventually. However, we've seen in the Roman Circus and we see now that there is a weak spot to this thinking. Eventually the elected body will split into a faction that represents business interests and a faction that trades entitlements for votes. The latter faction eventually gains control to an extent that they bankrupt the whole. We are nearing that stage now. Few Republicans will oppose entitlements and both Mr. Bush and Mr. Obama are guilty of ramp ups in deficit spending.

Buffett's proposal would patch this historically reoccurring weakness of representative forms of government. As hnsmurf points out, it would also create a slippery slope where no representative could be reelected if they vote for X, Y and Z policies that are not systemic threats.

As our government is not responding to an issue which can literally ruin us all, it seems to me that Buffett's proposal is the lesser of two evils. Stability demands a solvent government.

JoeAltmaier• 15 years ago

Stability also requires a stable government. Throwing all the scoundrels out sounds good, but would probably happen (I think they are all too selfish and would play chicken down to/past the wire). Resulting in chaos at the next election - an entire elected body of unknowns with no experience.

rsbrown2• 15 years ago

... no experience in the current system, that is. This proposal would change that system dramatically.

Upending congress might be tumultuous, but compared to bankrupting the nation it still counts as the lesser of two evils.

DougWebb• 15 years ago

That's the kind of revolution we're supposed to have when the government becomes corrupt. Also, it wouldn't be all at once; term overlaps ensure that there would be continuity.

highfreq• 15 years ago

At least then they would be playing chicken with their own re-elections not the US and World economy by proxy of the debt ceiling.

cheez6• 15 years ago

That is a brilliant summary. Not enough people make the connection to Rome in my opinion. I know it's hip to compare the US to Rome but it is actually borne out in the history. At least in my opinion.

Great idea by Mr. Buffet. Similar to Brazil's balanced budget laws, btw.

Next up: funny ways of counting GDP ;-)

khafra• 15 years ago

> Next up: funny ways of counting GDP ;-)

"Once a social or economic measure is turned into a target for policy, it will lose any information content that had qualified it to play such a role in the first place."

http://lesswrong.com/lw/1ws/the_importance_of_goodharts_law/

iwwr• 15 years ago

Don't underestimate their ability to redefine GDP or 'budget deficit'. Also, if push comes to shove, there is always the option of cranking up the printing presses (Congress can wrestle control of monetary policy if the Fed is too uncooperative).

TomOfTTB• 15 years ago

We just learned this lesson in California where voters recently passed an "on-time budget" initiative. The way it worked was Legislators didn't get paid after the budget deadline. In theory this would get them to pass a budget on time instead of drawing it out to the point of state insolvency like they did every previous year.

Did it work?

Of course not. They passed an absolutely fictional budget. It not only depends on California getting three times its previously anticipated tax revenue but it also depends on tax hikes that haven't been passed (passing a budget requires a majority while passing a tax increase requires a 2/3rds vote where at least a few Republicans have to sign on)

Bottom line: Government can always redefine terms

turbojerry• 15 years ago

Redefining GDP and deficit are likely, they are already looking at redefining CPI see-

http://www.zerohedge.com/article/aarp-screams-blood-murder-w...

Orwell was an optimist.

johngalt2• 15 years ago

"The American republic will endure until politicians realize they can bribe the people with their own money" Alexis de Tocqueville

streptomycin• 15 years ago

That's a nice quote, but it's misattributed.

http://en.wikiquote.org/wiki/Alexis_de_Tocqueville#Misattrib...

vannevar• 15 years ago

Eventually the elected body will split into a faction that represents business interests and a faction that trades entitlements for votes.

What makes you think that a faction that represents business interests does not also trade entitlements for votes? The real problem is that ALL factions in a democracy demonstrate the universal human tendency to take benefits today and put off obligations for the future.

rexf• 15 years ago

Business wants all upside (even when it conflicts). As discussed yesterday: http://www.nytimes.com/2011/07/06/business/economy/06leonhar...

The problem is that nobody has a long term sustainable point of view. Why worry about the eventual cluster#$%@ when you can stuff your pockets today?

shriphani• 15 years ago

This is exactly as Plato said. The republic - in action before our very eyes.

Tuna-Fish3• 15 years ago

The pre-requisite for that to happen is an electoral system that advantages larger parties, such as fptp. I've seen enough politics in different electoral systems that I honestly believe that most of the problems prevalent in America today would really be solved with a better way to elect congressmen.

nkassis• 15 years ago

Maybe increase the number? That would make bribing effort a little harder since it would require spreading the money to more people. Wasn't the house of representative supposed to be sized in proportion with the population of the US?

guptaneil3• 15 years ago

I wonder if future forms of government will even require congressmen to vote on legislation on our behalf, since the Internet would make it feasible for citizens to represent themselves.

pnathan2• 15 years ago

The key issue at hand is the culture. A cultural change must be effected such that everyone understands that the 'government cheese' (bread, circuses) brings the system down. Individual effort must be rewarded, and lack of effort must not be upheld. History records this over and over, providing a clear description of the effects of government cheese. Britain lost their dominance in part due to it.

It was not until the communism of China was mitigated that their economy began to take off.

I understand that the same thing happened with India and their socialist policies, but I am not as versed in India's history.

There are heavy negative effects that come into play when large-scale growth happens. The Industrial Revolution is the history of the West's large-scale growth. It's taking place in China now too.

Let us not delude ourselves that sunshine, rainbows, unicorns and world peace will suddenly come about. Futurama provides a humorous glimpse into that sort of future.

People are always self-interested and selfish, in the governmental scale. While we might not like that... we always prefer better things to happen to us and our little domains.

Meai3• 15 years ago

I actually agree with you somewhat although you are not saying a lot. We have to find a system where the fortune of a single person automatically contributes to the good of the whole. Capitalism is actually already surprisingly good in that regard, and that's why it has been so successful. But in the end, there will be people who are vastly more successful in any system, and we need a way to make all efforts automatically contribute to society. I don't mean taxes, because those can be controlled by a governing body and are regarded as external force. Nobody wants to pay taxes. No, we need motivators which are intrinsic to the human mind. People need to want to help. Let's not kid ourselves and think that we can just "pull ourselves together" and be nicer to each other in the future. Human nature can't be overridden by mere wishes. Capitalism works because there is nothing stronger than the motivation to provide for yourself and your family.

How do we use that motivation to nurture society as a whole? I don't know. Taxes are not good enough, as we can see today, they can always be outsmarted. You can't outsmart human nature, which means billions of people struggling towards a single goal.

jeffchuber• 15 years ago

The rate should be a factor of GDP growth - something like when GDP is growing 3%+, they can have 0 deficit, and shrinking, up to 5%.

Or just some way to save in the good times, and spend in the bad times.

aquark3• 15 years ago

But imagine motivations this could introduce: you can spend more money if you stall the economy !

phaedon• 15 years ago

I logged in just so I could up-vote this.

ajscherer• 15 years ago

Maybe I am misreading your argument, but it seems like you are saying the cause of the US deficit problem is that the faction that trades entitlements for votes has gained control of the system. If that were true, and this faction were really just concerned with entitlements, there would be an obvious solution to the deficit: raise taxes. This may be every bit as horrible as you imagine, but it wouldn't involve a debt crisis.

The problem as I see it, is that the faction that trades entitlements for votes and the faction that trades tax breaks for votes are both simultaneously in control. The low taxes people win all the fights about taxes, and the high spending people win all the fights about spending.

The bug in democracy that led to our deficit problem is the lack of anything to prevent us from voting to have our cake and eat it too.

ansy• 15 years ago

Tax breaks are just another form of entitlement. Tax breaks are almost worse than other government benefits. It's basically taking out interest only loans on the tax payer's behalf. Here's $500 ... Oh and by the way, that comes with $500 worth of debt with a 4% interest rate that you are going to pay forever.

gaius2• 15 years ago

This is exactly what happened in the UK; fortunately The People came to our collective senses and booted out Gordon Brown before he could dig us any deeper into a hole. Even then it wasn't clear cut: too many voters wanted hang onto lavish, debt-fueled spending. Those same voters march through the streets now demanding raises, generous pensions, instead of doing what the sane are doing, knuckling down to repair the gaping hole in our national wealth for the good of all.

hop• 15 years ago

Buffett's father was a 4 term congressman and an almost Ron Paul-like libertarian, btw.

http://en.wikipedia.org/wiki/Howard_Buffett

cheez6• 15 years ago

Warren Buffet made a tidy profit on the bailouts. He knew who was anointed to survive and who was not.

Of course Warren loves the influence of government!

jhamburger3• 15 years ago

He lives in a modest home in Omaha and will probably give more money to charity than anyone in history when all is said and done. Do you really think his political views are driven by his own personal gain?

nate_meurer2• 15 years ago

WB benefits from almost every movement in the economy, with or without government involvement. From everything that I have read, he has made plain his disinterest in the big investment banks and their fates. Here's a great example:

http://swampland.time.com/2009/09/15/warren-buffett-could-ha...

Brewer4• 15 years ago

Warren Buffet for Secretary of the Treasury

shmulkey184• 15 years ago

No thanks.

There is something intensely annoying about Buffett: his hypocrisy.

He claims that rich Americans are not paying their fair share of taxes, but doesn't take the obvious step of voluntarily paying more taxes by sending a big check to the IRS.

He supports the estate tax, supposedly because it is bad for America to have children receive inherited wealth. Of course, he has set up a foundation which his children will administer after his death. Naturally, they'll take a salary for this arduous assignment. And it just so happens that having an estate tax benefits the insurance companies in which he is heavily invested: 10% of insurance company revenue comes from the policies wealthy folks buy in order to avoid estate taxes.

He's all for rigorous corporate government and the avoidance of self-dealing. Except when these standards are violated by his subordinate and Berkshire-Hathaway heir-apparent David Sokol, who -- with the full knowledge of Buffett -- personally invested in a company that Sokol was pitching to Berkshire-Hathaway.

Buffett is clearly a shrewd investor. However, an economic holy man he is not.

Brewer4• 15 years ago

But he could end the deficit in five minutes.

joelmichael• 15 years ago

It is actually spelled Buffett.

davetufts• 15 years ago

What about laws that state only Congress can declare war or the rules of the War Powers Resolution? These don't stop the executive branch from engaging in war. Similarly, Buffet's simplistic solution wouldn't stop future deficits, because the ruling party could so easily redefine what a deficit is or what the GDP numbers are.

maxxxxx2• 15 years ago

I don't think it would stop the deficits. Instead we would get a new Congress every 2 years with crazier and crazier representatives.

bdunbar• 15 years ago

We've already _got_ a pack of thieves, idiots, never-do-wells and politicians (but I repeat myself) in Congress.

It can't get much worse.

maxxxxx2• 15 years ago

It can get much worse.

weavejester• 15 years ago

Actually, it could get a lot worse. There may be a lot wrong with the US government, but as governments go there are not many in the world that are considerably better, and a large amount of governments that are much, much worse.

pnathan2• 15 years ago

No, actually, we have some fairly functional people in Congress.

They are heinously self-interested and often vote pork and lobbyist groups, of course, but we do the same thing with our own little domains (hacking, free music, code, entrepreneurship). Very people have the ability to have the grand vision, and fewer have the ability to put that view in effect.

But we could have much worse. Much, much worse. A brief survey of world history in the 1910s, 1920s, and 1930s should serve to illustrate the meaning of "worse".

sajid• 15 years ago

I think people are missing the point, his suggestion is not meant to be taken literally. What he's trying to say is that reducing the budget deficit is more a question of political will than economics.

lmkg2• 15 years ago

Very much this. If you want to predict behavior, look at incentives.

For example, the California state budget. There's a constitutional requirement that it be on time, but every year we were setting a new record for how late it was. Then, we pass a law saying that if it's not on time the legislators don't get paid. Mirabile dictu, the budget is now on time. Granted, the requirements for passing the budget were also lowered, but aside from that the Democrats were generally displeased with the budget they passed and I nearly certain that they would have waited around and tried to swing another 4 Republican votes rather than pass what they did.

At the federal level, there's nothing pushing the politicians to balance the budget, except for people who vote on that issue. But it's a rather abstract issue and not a lot of people vote on it compared to, say, abortion. No voting pressure, no lobbying dollars, and no legal repercussions means the problem won't get addressed. Buffet is suggesting changing the last of those three, although any of them would be enough.

dsmithn• 15 years ago

Definitely. He keeps going back to the point that the debt was at 120% and nothing terrible happened, but now we have these politicians threatening to figuratively play Russian Roulette with our debt rating just to get the results they want.

The point is they shouldn't be threatening us - we should be threatening them for not getting it done.

goombastic• 15 years ago

I ask this here because this is a hacker forum. Why is it that in this day and age that we still implicitly entrust another person to make decisions on our behalf? What do you think would be the kind of systems we need to build to make democracy more participative? What do you think would be the pitfalls we should avoid with such a system?

ceejayoz• 15 years ago

> Why is it that in this day and age that we still implicitly entrust another person to make decisions on our behalf?

We don't. Congressional approval is always horrendously low.

The alternative just sucks more.

Klinky2• 15 years ago

At some point you're going to have to trust someone(e.g. whoever made the libraries you're using in your program did it properly or that the person making your sandwich washed their hands first), but I'd agree it'd be nice if we could make the system less of a popularity contest that's full of hyperbole & 5-second or less sound bites.

I think we need more political parties & vast limitations on campaign financing. I'd also love if we could test reading comprehension & basic logic skills before allowing people to run for office.

cjg• 15 years ago

http://www.jadeleaf.co.uk/voting-is-bad

lucasjung4• 15 years ago

One big problem I see with this: in time of war, it is often not only necessary but desireable to run a deficit. Imagine if we had been forced to run a balanced budget during WWII! I would imagine that in such dire need, members of congress would "take one for the team" and run a deficit in order to sustain the war effort, but then you have the classic "changing horses mid-stream" problem when you turn over literally the entire legislature in the middle of a war.

I think that a much more practical constitutional amendment would be to simply prohibit congress from appropriating funds in excess of revenues unless a war has been declared. There is a risk of congress declaring needless wars for the sole purpose of justifying deficits, but that would require the cooperation of both parties, and I would bet that the opposition party would see more potential gain in opposing the war and demagouging its supportors than in letting the majority party have their war of convenience.

code_duck• 15 years ago

When have we not been 'at war' in the past 40 years?

WalterSear2• 15 years ago

We have not been at war with Eurasia for the past 40 years. We have always not been at war with Eurasia.

pgsucksdick• 15 years ago

As much as you might like to think differently war is always negatively productive.

There might be some corner cases where the destroyed wealth is replaced by more efficient use, but they have yet to demonstrate themselves.

Dove2• 15 years ago

Oh, I don't know. I think it can be a positive thing for a nation to not get conquered.

lucasjung4• 15 years ago

>As much as you might like to think differently war is alway negatively productive.

I never suggested that war has a positive influence on an economy, so I'm not sure where you got that impression. I was suggesting that one political party or the other might want to use war as an excuse for deficit spending to further their political agendas.

That being said, war can be positively productive if you are outside of it, selling to one or more of the belligerents. That's mainly how WWII was so positive for the U.S. economy: we were selling to the allies for several years before we got directly involved. The Russians made plenty of money selling to both sides of the Iran/Iraq war, and I'm sure that those are just two of many, many examples throughout history.

johngalt2• 15 years ago

The next headline would be "permanent war declared against Oilistan" and war spending is never a boondoggle.

Governments always use a crisis to grow their power.

pmichaud• 15 years ago

I'm not sure of the exact dates we've been at war since WW2, but I just checked and saw that we've been engaged in armed conflict continuously since at least before I was born. I don't think that rule would really work.

"No, I mean a REAL war..." Yeah.

lmkg2• 15 years ago

Actually "a REAL war" is a meaningful distinction because the term "war" is defined in the Constitution, so it can't be fudged without an amendment. It's only a war if Congress formally declares war on another country, and that hasn't happened since WWII.

CoryMathews• 15 years ago

Couldn't they just declare war against evil (terrorism, gangs, crime, etc) or some other loop hole war to get around it.

swaits• 15 years ago

Nah, they would like totally never do that! ;)

flogic• 15 years ago

We currently have at least one needless war. So I wouldn't put it past them.

ivoflipse• 15 years ago

Ironically the congress 'takes one for the team', while the companies that supply the army gain profit over the backs of everyone's tax money.

If everyone truly took one for the team, wars wouldn't have to be as expensive, because everyone would be fighting for their survival.

While its important to win a war, should it be won at any cost and who should pay the price?

AdamN• 15 years ago

It would take more than a law to block reelection for sitting legislators - it would take a Constitutional amendment. I'd like to see Buffet get that done in 5 minutes.

rnernento• 15 years ago

What's sad about this is we shouldn't need to pass a law, voters could easily enforce this. There is a massive problem right now with a lack of accountability, not just for the debt but for all the horrible decisions congress makes.

MarkMc• 15 years ago

I thought the more interesting part of the interview was when he said that social security payments should have higher priority than bond interest payments. That sounds it would result in a worse credit rating and much larger pain in the long term...

sethg• 15 years ago

Budget deficits shouldn’t be any more of an automatic trigger for re-election than the unemployment rate, the inflation rate, the number of body bags coming back from a foreign war, or any other undesirable thing.

WalterSear2• 15 years ago

That wouldn't end the deficit: it would give us a permanent deficit of 2.99%. Still, an improvement.

naughtysriram• 15 years ago

cool... :)

ck2• 15 years ago

Right, they'll do that right after they give up their gold-plated healthcare and instead take the government offering for the uninsured.

Gabrielle Giffords would be permanently disabled and disfigured, unable to ever speak or move because of lack of therapy if she was an average citizen standing in that crowd, with the average american insurance or lack thereof.

I love how the topic is constantly steered off healthcare. Remember the mosque in NYC? Remember how all that noise suddenly disappeared?

cafard• 15 years ago

You can fix failing schools in 10 minutes: establish that teachers can be fired if the test scores aren't OK. This has the disadvantage that it's a hell of a lot easier to go back and tweak the tests handed in (see Atlanta; see some DC schools) than it is to educate the kids.

But the test scores look great.

brown9-2• 15 years ago

Isn't this already the case with NCLB? Higher test scores on their own don't "fix" the problems with education.

yaix2• 15 years ago

Why does this populist nonsense get so many votes? Typical generalized politicians bashing. If you feel that you rep. is so evil, than just don't elect them. Better still, stand yourself and do a better job. Or at least help the guy you think will be doing a better job. It's all about the participation of the Demos, that's why they call it democracy.

MarkPNeyer• 15 years ago

when congress' approval rates are in the single digits but reelection rates are 80%, its clear that something is broken.

yaix2• 15 years ago

What do you mean with "something"? The brains of the voters?

jws• 15 years ago

One possibility is that the job of congressman becomes a 2 year job and you have to dole out enough goodies in two years to get a secure post-congress position.

PotatoEngineer• 15 years ago

Ouch. Accurate, but ouch. Bonus points: Eternal September in Congress, as we're always getting a new crowd of inexperienced people.

Androsynth• 15 years ago

Wouldn't the unintended consequence be that the parties become even more powerful than they are now? All the long-standing politicians would move out of official govt capacity and into essentially the same position in their parties, while unknown pawns get elected to the official positions.

shareme• 15 years ago

Better idea... Vice Presidents who still hold shares in companies that still hold gov contracts despite censure..Impeachment as the whole 3.4ths of current deficit was by start of wrong wars Iraq especially..

gavanwoolery• 15 years ago

<TROLL> Nice, but I can end it in 4 minutes: STOP. SPENDING. MORE. MONEY. THAN. YOU. HAVE. </TROLL>

T_S_• 15 years ago

I liked the preface to the comments section below the video:

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data, ability to repeat discredited memes, and lack of respect for scientific knowledge. Also, be sure to create straw men and argue against things I have neither said nor even implied. Any irrelevancies you can mention will also be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

Bluth53• 15 years ago

I had the same reaction. While somewhat pessimistic and possibly offensive toward some visitors, it distills the times found around the web in an eloquent, satirical manner. While I prefer offensive and rotten humor, many would argue this type of remark defies all sorts of social media "how-to"s and guidelines for positive engagement yada yada.

greyfade• 15 years ago

Or, you know, he could pay his taxes.

gojomo• 15 years ago

What if instead of a stick – no reeslection for you! – we used a carrot? What if the sitting lawmakers who voted for a balanced budget eventually get a giant financial bonus? (To minimize monkeybusiness, we could require it to have been balanced in retrospect, say via assessment 2-10 years later.)

People – even Congresspeople! – respond to incentives.

Let's assume that the goal – the fiscal stability of a balanced budget – would be a noticeable boost to our $14-trillion-plus economy. Then the incentive could be quite huge – perhaps a million dollars per congressperson per year in balance – and still pay for itself, many times over.

Other interests are making millions per year from the legislative 'generosity' that results in a perpetually out-of-balance budget. Why not pay directly for the alternative result we prefer?

jasonmoo• 15 years ago

my god cnbc is obnoxious. 9 logos on the same screen. breaking headlines of the interview currently in progress. 5 different bars all blocking the view with equally unimportant text. and the swoush sound effects... seriously you guys. seriously.

JohnLBevan• 15 years ago

Spending more than you earn? Idiots in charge. Cut back on essentials, keep the things that make you happy, still get re-elected. Hmm, anyone else see a minor flaw?

vorg• 15 years ago

> I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.

Incentives matter, but this incentive would attract candidates who don't want re-election, perhaps old and sick people who expect to die or retire.

Also, how do you measure GDP? Whenever someone drinks a pint of whiskey at the bar, then drives home and kills other motorists, the whiskey sold, car fix-up costs, ambulance and hospital fees, insurance and re-insurance premiums, prison costs, and court settlements all contribute to "GDP", even though real quality of life has gone way down.

And of course any law passed can be repealed by the same margin.

skybrian• 15 years ago

Some people will play to lose.

Troll_Whisperer• 15 years ago

>“I could end the deficit in 5 minutes. You just pass a law that says that anytime there is a deficit of more than 3% of GDP all sitting members of congress are ineligible for reelection.”

I understand his line of thinking, but the question is could he pass that law? He has a substantial amount of money that could be spent on lobbying, media, etc. But how do you get people who have spent a career chasing power to sign a law that will strip them of that power?

Warren Buffett: I could end the deficit in 5 minutes.

Related Stories