Dead Men Are Running America's Budget, and Their Policies Are Bankrupting Your Kids

What does it mean when the co-founder of America's premier nonpartisan fiscal policy institution tells you that both parties have systematically abandoned the working class, the young, and the American Dream. Not by accident, but by design?

Eugene Steuerle co-founded the Urban-Brookings Tax Policy Center, earned a Bronze Star in Vietnam, taught himself economics via correspondence course while serving in the Army, and has spent five decades at the center of every major U.S. fiscal debate. He has testified to Congress roughly two dozen times, received the Paul Samuelson Award for Dead Men Ruling, and has now followed it up with Abandoned, a damning account of how both political parties locked in spending for the elderly and wealthy while leaving everyone else behind.

In this episode, Professor Kotlikoff sits down with his longtime friend and intellectual ally for an unsparing conversation about the structural forces driving America's fiscal crisis, who is getting hurt, and what it would actually take to fix it.

What You'll Learn:

• [00:01:01] Why the Social Security shortfall is far worse than the headlines: a 31% immediate cut for all 71 million beneficiaries, or a payroll tax hike from 12.4% to 18.1%
• [00:14:54] The core thesis of Dead Men Ruling: how permanently baked-in entitlement spending has eliminated Congress's ability to do anything new
• [00:16:24] Why Social Security, Medicare, and interest on the debt already grow faster than total revenue over the next decade
• [00:17:07] The difference between financing consumption and financing upward mobility, and why that distinction explains the working class rebellion
• [00:32:00] Gene's CBO data: the elderly have gone from most likely to be poor in 1979 to least likely today, while non-elderly families moved in the opposite direction
• [00:35:03] What Gene would do as fiscal dictator: force real entitlement growth to require annual congressional authorization
• [00:39:56] The two trends dominating 50 years of policy: runaway retirement and healthcare spending, plus cuts to capital income taxes, driving wealth inequality and government dependence simultaneously
• [00:41:59] Why the national saving rate has collapsed from 15% in the 1950s to 1.48% today, and what that means for who will own America's future
• [00:44:00] The Jamaica scenario: capital-rich but foreign-owned, with most Americans as servant workers rather than asset owners
• [00:51:26] Who is the least subsidized group in the entire US healthcare system: moderate-income workers whose employers offer insurance
• [00:54:37] Why Congress is wrong to think AI will save the budget, and what we should be building instead

Resources:

• Abandoned by Eugene Steuerle: amazon.com
• Dead Men Ruling by Eugene Steuerle: amazon.com
• The Government We Deserve (Substack): governmentwedeserve.substack.com
• Eugene Steuerle's website: steuerle.org
• Urban-Brookings Tax Policy Center: taxpolicycenter.org
• Economics Matters Substack: larrykotlikoff.substack.com

Featured Guest:

Eugene Steuerle is an Institute Fellow and Richard B. Fisher Chair at the Urban Institute and co-founder of the Urban-Brookings Tax Policy Center. He holds a PhD from the University of Wisconsin-Madison and has served as Deputy Assistant Secretary of the Treasury for Tax Analysis. Author of 20 books and over 1,600 articles and congressional testimonies, his most recent book is Abandoned. He publishes the Substack The Government We Deserve.

Economics Matters: The Podcast is hosted by Larry Kotlikoff, Professor of Economics at Boston University.

Disclaimer: Any opinions expressed on Economics Matters are those of the authors and guests. These are not the opinions of Boston University or Economic Security Planning, Inc.