Author Swanson describes the potential and very possible catastrophe of a bankrupt America. Some of his concerns are a national debt of $7.3 trillion (or $24,910 per person), rising consumer debt, and a global trade deficit of nearly $490 billion in 2003. According to Swanson, foreign investors are sending the U.S. about $2 billion every business day and without this money, the country would be broke now. Some of these foreign investors are becoming worried about the country's ability to repay this debt and may not continue to support the U.S.'s level of spending. Recent tax cuts have lowered revenues, and entitlement programs such as Social Security and Medicare have been expanded through the decades in ways never anticipated by the original designers of the plans. Swanson declares the Social Security Trust Fund has no assets. For decades, the government has been siphoning funds from the Trust Fund to pay current expenses, leaving only Treasury IOUs in the fund. The first of the baby-boom generation will be eligible to retire in 2008 at which time there will be about three workers for each beneficiary. As more members of this generation retire, there will be fewer workers per beneficiary to pay for the benefits. Swanson is adament that the longer the country waits to begin to remedy the situation, the more difficult it will be. He also insists this is not a partisan issue and that members of both major parties have been reluctant to take the necessary steps to curb spending and balance the budget.
Gerald J. Swanson is the Thomas R. Brown Chair in Economic Education at Eller College of Management at the University of Arizona in Tucson. He coauthored Bankruptcy 1995, which spent nine months on the New York Times bestseller list.
Reviewed by mc, 01/05. Other reviews by mc.