As the last United States president to preside over a balanced budget, Bill Clinton has a special status in the current discourse over what to do about a deficit that is around 10 per cent of the gross domestic product.
When Mr. Clinton speaks on the subject, people listen -- even Republicans, if grudgingly.
The former president was headlining the Peter G. Peterson Foundation's 2011 Fiscal Summit, a lollapalooza for policy wonks that featured an array of lawmakers, economists and journalists, whose mission was to focus the attention of American voters on the most critical long-term economic problem they face.
Some advice from Mr. Clinton to the nation's current leaders: ignore the polls. He said some of the most import things he did as president, such as organizing a rescue for Mexico, were extremely unpopular -- yet he managed to win consecutive terms. The reason: in part, because decisions that were unpopular in the short term brought about a sounder economy over the medium term. "You have to think about where the end will bring you out."
Mr. Clinton dismissed the argument that big, immediate spending cuts will help the economy. Citing Britain, where the economy has stalled in the aftermath of the Cameron government's austerity program, Mr. Clinton said the "early results are not encouraging."
It will surprise no one that the former Democratic president advocates raising individual tax rates back to the levels they were at when he was in charge. But it might surprise a few that Mr. Clinton also would cut corporate taxes to attract investment and compete with the U.S.'s economic rivals. He would attempt to retain some of that revenue by ending the myriad of tax breaks offered in the U.S. tax code.
"Everyone would have to pay something," he said. "You wouldn't have some companies paying 30 per cent, and others paying 10 per cent."
The other thing Mr. Clinton would do is treat voters as intelligent individuals. He said Americans need to understand that the U.S. debt is a present problem, not a future one. For example, U.S. trade actions have decreased 80 per cent over the past decade, Mr. Clinton. Why? Some might say because the Bush administration stopped harassing the country's trading partners. Mr. Clinton says it is because the U.S.'s biggest trading partners also own much of the country's debt. "No one slugs their banker," Mr. Clinton said. "You have to be in a position to enforce your trade agreements."
Another example is healthcare, the cost of which is rising so fast that it is "consuming the economy." Something voters need to hear is that the reason wages are rising so slowly is because paying health benefits costs companies so much money they have nothing left for salaries, Mr. Clinton said.
The former president disagrees with the approach of House Budget Committee chairman Paul Ryan, which would replace the federal government's health program for seniors with vouchers that the elderly could use to buy insurance. Voters in a special congressional election in New York appear to agree, choosing a Democrat over a heavily favoured Republican on Tuesday.
But Mr. Clinton cautioned Democrats to read the election correctly. He contends it was a vote against Mr. Ryan's proposal, not a vote against overhauling the way the U.S. delivers healthcare.
"I'm afraid Democrats will interpret that as we can't do anything about the cost, and I completely disagree with that."