Fiscal Follies

Some are surprised that more of that hasn’t already happened. “I think the myopia in the financial markets right now is absolutely mindboggling,” says Erica Whitt-linger, a former Twin Cities money manager and a National Public Radio Sound Money commentator who now runs a financial consulting firm in Minneapolis.

In the early 1990s, Whittlinger was a leader in the Concord Coalition, a grassroots organization that advocates generationally responsible fiscal policy that has been at the forefront of efforts to raise awareness of the nation’s fiscal problems. Former Minnesota congressman Tim Penny is the policy chair.

Since 2005, the Concord Coalition, working with David Walker, the Heritage Foundation (a Washington, D.C.–based conservative research and education think tank), and the Brookings Institution, a public policy organization that’s also based in the nation’s capital, has held “fiscal wake-up tour” events across the country that feature traveling economists who talk about “why budget analysts of diverse perspectives are alarmed by the nation’s daunting long-term fiscal outlook,” according to the tour’s Web site.

Peterson cofounded both the Concord Coalition and  the New York–based Blackstone Group, one of the world’s largest private-equity firms. In February, he announced plans to commit at least $1 billion of his personal fortune to his new foundation, tapping Walker, in the 10th year of a 15-year appointment, to lead the foundation.

As comptroller, Walker made roughly 150 speeches annually. “Every speech I give, I take on the fiscal issue,” he says. “We have way too many people who are living for today and not preparing for tomorrow.” He says he left the federal government so he could take up the opportunity “to be more specific and more assertive” addressing concerns about federal budget practices.

Critics say Peterson, Walker, and other budget hawks have for years envisioned a fiscal apocalypse that has never come to pass. Somehow, the U.S. keeps muddling through; today, it still stands as the powerhouse of the global economy.

Outlook Dimming

Worries about the fiscal picture were voiced often during the 1992 presidential campaign, when third-party candidate Ross Perot became famous for his charts and graphs illustrating runaway deficits.

Then the nation did take action. Congress and the Clinton administration embraced pay-as-you-go budget policies, which meant new spending programs had to be offset by either spending cuts or tax increases. It didn’t hurt that the economy flourish-ed, generating more tax revenue.