I.O.U.S.A. (13 page)

“ When we thought of the idea of starting Concerned Youth of America, ” says Yoni Gruskin, one of the organization ’ s founders, “ the goal was to be the face of the generation that ’ s going to be affected by the national debt and to try to put a human touch to it. ”

Concerned Youth

The organization

’ s founding members

— Yoni Gruskin,

of America (CYA):
John Gwin, Prateek Kumar, Martin Serna, and Mike Tully —

The CYA was

were not your average high school students. In the early
created to increase

months of 2007, as seniors at the prestigious Phillips Academy
awareness of the

United States’

in Andover, Massachusetts, they took it upon themselves to
fi nances among

create this nonpartisan organization to help raise awareness
the nation’s youth.

among their generation about the United States ’ fi scal chal-This non-partisan

lenges. After all, they will be the ones footing the bill tomor-organization

now exists on

row for today ’ s reckless spending.

college campuses

“ It stinks, ” says the organization ’ s director of communica-throughout the

tions, Mike Tully. “ Our parents talk our ears off from the time
country and has

we ’ re ten about fi nancial responsibility — this is what you have
been successful in

to do, don ’ t get into credit card debt, you have to pay for what
holding a number

of grassroots

you buy, you have to save your money. Then the politicians
educational

who are supposed to represent your values and represent
activities.

what you want, they just are doing the same thing. They ’ re telling you one thing and then doing another thing. And you want to look at them and say, how can you not realize that this is going to damage our future? ”

Specifi cally, CYA is concerned about the consequences of burgeoning federal debt, and the drain the unsustainable c02.indd 34

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Chapter 2 The Budget Defi cit
35

entitlement programs will have on the U.S. economy. They ’ re strategically targeting their peers and seeking to educate the younger generation on the reasons federal budget defi cits occur. You get the sense when you talk to them that they ’ ve given up on anyone in the older generation calling the shots in Washington or ever making sound fi scal decisions.

“ This situation is comparable to my parents incurring serious credit card debt before I was born, ” says Chrissy Hovde, 23, the northeast regional director for the Concord Coalition, “ and through my entire lifetime, and then expecting me to pay for it at some point in the future — and that ’ s insane. ” The founders are now freshmen at the University of Pennsylvania. But they

’ re building a network of stu-

dents that are interested in learning more about the United States ’ fi scal challenges and what it means for their generation down the line. Today, there are chapters of CYA on the campuses of Harvard, Yale, Duke, and the University of Pennsylvania, and they hope to spread their reach throughout the country.

In November 2007, we met and fi lmed Yoni, Mike, and another member of CYA, Caroline Matthews, while they were gearing up for two events that they, in association with the Concord Coalition, were putting on at Penn. Most of the students unconnected with the movement who attended were more interested in the promise of free pizza. Undaunted, Yoni told the
Daily Pennsylvanian,
who had sent a reporter to cover the event:

“ For us, it

’ s not about raw numbers. It

’ s about our

future. ”

“ Whenever you talk to someone about the federal debt, ”

Mike Tully told us, “ they ’ re always like ‘ Yeah, that ’ s really interesting, that ’ s awesome, ’ but that ’ s about it. It ’ s hard to really, really get kids inspired, but I think we ’ re starting to do that. We ’ re starting to get a lot of interest, especially with the 2008 election and the youth starting to realize that they do have a voice. Kids are now starting to take the extra step. It sort of gives you hope. ”

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36 The

Mission

Is Anyone Listening?

While Concerned Youth of America are throwing a lot of energy at the prospect of getting their peers in the younger set to pay attention, you have to wonder if anyone else is paying attention. In fact, while we were fi lming in New England, we captured a perfect example of why and how the story doesn ’ t get more traction among politicians.

We had followed the Fiscal Wake - Up Tour to Concord, New Hampshire, and beyond. In one day we did a radio interview; met with the editorial boards of the
Manchester Union
Leader
and the
Concord Monitor
; held a luncheon for business leaders and members of the State House of Representatives at the Capitol Arts Building in Concord; and later that evening held a Town Hall session at St. Anselm ’ s New Hampshire Institute of Politics.

Scott Spradling, the political reporter for WMUR TV, an ABC affi liate in New Hampshire, came to the luncheon in Concord with a TV crew.

“ Yankee frugality is alive and well here in New Hampshire, ” Spradling commented,

“ and when it comes

to numbers and crunching the dollar signs, this is the state where this type of dialogue makes a lot of sense. Off the top of my head, it ’ s the type of story that we ’ ll probably put into the middle of the newscast. It ’ s a red meat dialogue, something that we ’ ll try to just bring some attention to — what this effort is, what the tour is — and I ’ m sure it will get some moderate play in the news. ”

Later that evening, a major snowstorm blanketed the area. Dave and Bob just barely made their fl ights back to Washington. Spradling and his cohost opened the show with coverage of the storm. Then the “ red meat dialog ” of the program covered a man from Hollis, New Hampshire, who swal-lowed his wife ’ s diamond ring rather than handing it over to the police. The Fiscal Wake - Up Tour segment didn ’ t make the news that night.

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Chapter 2 The Budget Defi cit
37

Similarly, the members of the House of Representatives did not attend the luncheon at the Capitol Arts Building. They were holed up debating a ban on smoking cigarettes in public areas in the state.

The story was featured in the
Concord Monitor
and the
Manchester Union Leader
on February 14, 2007. But the message they were delivering seemed to have been missed, as evident in commentary stated by Isabel Sawhill of the Brookings Institution and Allison Fraser of the Heritage Foundation.

Isabel Sawhill: “ It ’ s not a wolf at the door, ” she said to a reporter from the New Hampshire
Union Leader.
“ It ’ s termites in the woodwork. ”

Allison Fraser:

“ What we

’ re talking about, the things

that need to occur — either restructuring of entitlements or restructuring the tax structure — are going to affect the middle class. ”

While two local papers covered the story, the exclusion of the Fiscal Wake - Up Tour story from other media points to a larger problem with the media in America. How can the average American be expected to know anything of the budget crisis their country faces when the nightly local (and more often than not, national) news favors stories on the latest socialite to be incarcerated for drunk driving, or, in this case, an engagement proposal gone awry?

The Committee to Save the World

During a brief period in the 1990s, politicians and the media appeared to recognize the challenge and got together to try to fi x the nation ’ s fi nances.

Both the

“ Our federal fi nancial problem is worse today than it was
Republicans and
in 1992, ” says David Walker, “ but back then the media, busi-
Democrats worked
ness leaders, and several presidential candidates made fi scal
toward balancing
responsibility a key issue. The country woke up, recognized
the budget in the
the challenge, and demanded change. ”

1990s.

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38 The

Mission

Six weeks before the 1994 Congressional election, a group of Republicans released a document called the “ Contract with America. ” The Contract, which was built upon a large amount of text taken from Ronald Reagan ’ s 1985 State of the Union address and ideas that originated at the conservative think tank the Heritage Foundation, detailed the actions the GOP would take if they became the majority in the House for the fi rst time in 40 years. Seen as revolutionary by many, the document laid out major policy changes, including 10 bills to implement major reform in the federal government. Though most of the bills died in the Senate, there were a few notable exceptions, including the Fiscal Responsibility Act.

This Act contained two budgetary reforms: a constitutional balanced budget and a permanent line item veto.

Those on the right saw the Contract as not only a triumph for GOP leaders Newt Gingrich and Tom DeLay, but also as a major stepping - stone for the balanced budget that occurred in 1998 and as a jumping - off point for the ensuing bull market in the U.S. economy. Those on the left often gave credit to then Treasury Secretary Robert Rubin, Deputy Treasury Secretary Larry Summers, and Federal Reserve Chairman Alan Greenspan, aka “ The Committee to Save the World. ”

We interviewed Robert Rubin about the political coalescence that took place during the 1990s. We met Rubin in the corporate offi ces of Citigroup in New York City, where he was presiding over the Citigroup executive committee.

“ Politics of sound fi scal policy are very diffi cult, ” says Rubin, “ because the natural inertia in the political system is toward federal programs, most of which are very useful.

Therefore the inertia is toward spending on the one hand and tax cuts on the other. ”

But, the former Treasury secretary went on to explain, “ in order to have sound fi scal conditions, it is necessary to not only constrain spending, but to also provide for adequate revenues. What ultimately is involved are very diffi cult trade - off decisions involving federal programs and what the American c02.indd 38

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Chapter 2 The Budget Defi cit
39

people want their government to do . . . then providing the means to pay for it.

“ I left Treasury in July 1999. In 1998, the federal government of the United States had a fi scal surplus for the fi rst time in, roughly speaking, thirty years. The projections forward based on the fi scal policies then in place were for continued surpluses for long, long time into the future. I thought that what had happened — well actually, I ’ m not going to say what I thought. What
had
happened

I thought that what had happened

was that a political coalescence
was that a political coalescence
had occurred or developed around
had occurred or developed around
maintaining fi scal discipline, which
maintaining fi scal discipline.

is a very diffi cult thing to do politi-

—ROBERT RUBIN

cally because it requires spending

constraint and adequate revenues. And I thought we were on that track. ”

Unfortunately, as you ’ ll see, that didn ’ t last long.

What Were They Thinking?

With the projections for surpluses well into the future, the owners of the debt clock in Times Square decided to turn off the debt clock that real estate mogul Seymore Durst had erected in 1989 to show the amount of money owed by the government.

“ It happened this week,

” said one reporter,

“ something few of us thought we ’ d ever see. The national debt clock was turned off at noon last Thursday, having outlived its purpose. While the national debt has hardly disappeared, it stands somewhere in the fi ve trillion dollar range; it is slowly winding down, having dropped by over a hundred billion dollars since the fi rst of the year. ”

“ When the debt clock was turned off, ” says Bob Bixby, “ I thought, ‘ This is going to get ugly. ’ It sends a signal that the problem is solved, and those of us that were looking at the long -

term numbers knew that the problem really wasn ’ t solved, and frankly weren ’ t very surprised to see the debt clock go back on again a few years later. ”

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40 The

Mission

In July 2002, just two years after it had been turned off,

The National

Debt Clock:
First

Douglas Durst, son of Seymore Durst, decided to start it up
erected in Times

again. At that time, the clock showed the United States gov-Square in 1989, the ernment owed more than $6 trillion, or $66,000 for every
national debt clock

American family.

was the brainchild

Mr. Durst turned the clock back on because he thought
of real estate

developer Seymour
the American people needed to be reminded that the surplus
Hurst, who had

of the late 1990s was long gone — and the era of defi cit spend-grown increasingly

ing was back.

despondent over

“ My father had many ideas of how to bring out the grow-the growing

ing danger of the debt, ” says Durst. “ At one point he sent out
national debt. By

the end of 2008, the

a New Year ’ s card to all the people in Congress, saying, ‘ Happy
Durst family will

New Year: You owe the Federal Government thirty thousand
have to order a

dollars. ’

new clock because

“ When we put this sign up we moved it from around the
the current one