Sonderbooks Book Review of Running on Empty

Reviewed September 12, 2004.
Farrar, Straus and Giroux, New York, 2004. 242 pages.
Sonderbooks Stand-out 2004, #2, Current Issues

Before I say anything else, I want to make it clear that the author of Running on Empty is a Republican. This isn’t a book by a Democrat simply sniping at the recent tax cuts. This is a book from an economical perspective that shows why the tax cuts were only one more part of policies that are heading America toward economic meltdown.

The author admits that Republicans, with the “no tax increases” mantra, are only making the problem worse. However, he shows how, historically, the problem was begun by Democrats setting up entitlements. He demonstrates that both parties carry some of the blame for the fix we are in, and both parties will need to work together to fix the problem, or our children will pay the price. (It worried me a bit to realize that when the author speaks of his children’s generation, he may be talking about people my age.)

He says, “First we had the ideologues of tax and spend. Then we had the ideologues of don’t-tax and spend. Today, both have triumphed, with the result that the United States is committed to spending literally trillions of dollars more in personal benefits and collective security over the coming decades than citizens either expect or can afford to pay. The Democrats and the Republicans, with their lopsided and mutually irreconcilable worldviews, have found only one important way to compromise, and this is for both sides to take what they want (low taxing and high spending) and send the bill to our kids.”

The author uses the first few chapters to establish firmly and decisively that there is a problem. He shows this problem from many different perspectives. “‘If all these numbers are making your head spin, don’t worry; just remember that they are all big, and they are all bad,’ explains David Walker, comptroller general of the nonpartisan General Accounting Office.” This nicely summarizes the first few chapters of Running on Empty. There are plenty of big, bad numbers.

Next, he looks at the history behind our fiscal problems, with chapters titled “How the Democrats Got Us Into This Mess (With Republican Help)” and “How Republicans Got Us Much Deeper (With Democratic Help).” He doesn’t praise Reagan’s tax cuts in this chapter, and shows historically why they caused problems. He’s even less enthusiastic about Bush’s recent cuts.

I like the next chapter—“Ten Partisan Myths.” He gives five myths proclaimed by Democrats and five that are favorites of Republicans. Some are exactly what a conservative friend used to explain to me why Bush’s tax cuts were good economic policy. Of course, I needed my own eyes opened on the other myths. After that, he looks at more historical and root causes of our current problems.

However, this book isn’t only about gloom and doom. Peter Peterson does present a chapter with possible solutions. First, he believes that voters need to be informed, which he has tried to do in this book. “Where concerned voters are informed, leaders can start taking action. And when concerned and informed voters mobilize and create a nonpartisan consensus—that’s when the whole direction of national policy begins to turn around.”

He offers some concrete suggestions for specific problems. I like his suggestion for reforming Social Security. He recommends that we switch to price indexing instead of wage indexing. Right now, benefits go up as wages go up. If we instead indexed benefit increases to price increases, you could still be sure that future benefits would buy the same amount of goods as they do now. They wouldn’t replace the same amount of wages, but they would have just as much buying power.

The author says, “Under this plan, most boomers and all younger Americans would not get the additional real benefits that are currently promised. But they probably are not going to get them anyway, and they know it. Instead, they will have the peace of mind of knowing that they can count on today’s real-benefit level.” I know that I will feel lucky if I end up getting anything out of the system.

He has more suggestions, and more facts behind his claims. This is an important book, about an issue that goes far beyond partisan politics. I hope that many people will read it and take it to heart.

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Book Reviews by Sondra Eklund

*****Running on Empty*

How the Democratic and Republican Parties are Bankrupting our Future and What Americans Can Do About It

by Peter G. Peterson