Ross Perot Answers Your Questions

INSERT DESCRIPTIONRoss Perot

We recently solicited your questions for Ross Perot.

You asked him about third-party candidates, the national debt, what kind of car he drives, and “why do guys from Texas with the initials R.P. have so much integrity?” (We’re pretty sure that last one was a reference to our earlier Q&A with Ron Paul.)

Perot doesn’t have an answer for the R.P. question, but he fielded quite a few of the rest. Thanks to him for his answers and to all of you for the good questions.

Question

How will you respond if Obama puts through the tax increase he has promised, particularly with respect to the capital gains tax increase he has promised?

Answer

President-elect Obama appears to be leaning toward a delay in his tax increases for the wealthiest 5 percent to pay for his promised tax cuts for the remaining 95 percent. History has shown that raising taxes in a recession tends to worsen the situation. We would encourage him to delay his proposed increases and implement his proposed tax cuts. We ascribe to the theory that tax cuts boost the economy — and therefore increase total tax receipts — no matter which portion of the tax-paying public receives the tax cuts.

Question

I remember when you were running for president, and they showed you driving around in your old Volvo. What are you driving now? And what would you do about the U.S. automakers’ woes?

Answer

Actually, I was driving a 1986 Oldsmobile. I have always driven American-made automobiles, and I currently drive a Ford product.

Clearly, General Motors meets the definition of too big to fail, as do Ford and Chrysler. General Motors happens to be closer to running out of cash at this moment. The question is whether domestic automaker sales are slumping as a result of the short-term liquidity credit crunch or more basic reasons such as their business models. I suspect both are to blame, but the proportions are difficult to determine. An analytical approach would favor a prepackaged bankruptcy, but the situation is well beyond that stage. It’s now in the hands of the politicians who are almost certain to craft some type of bailout or bridge-financing feature to keep G.M. out of liquidation.

Question

Have the politics of multinational corporations destroyed our sovereignty?

Answer

While the question is intriguing and thought-provoking, I do not believe that multinational corporations are threatening the sovereignty of the United States. I do believe, however, that we could be our own worst threat to our sovereignty if the United States is forced to keep borrowing huge amounts from foreign countries. The old rationale for the federal debt — “We owe it to ourselves” — is long gone. Nearly half of our public debt is now held by foreign individuals, foreign corporations, and foreign central banks. Such entanglements could complicate matters to the point that our balance of payments could control our foreign policy, which could put us in a dangerous negotiating position.

Question

You were close to the auto industry for a while. What should we do about it?

Answer

Each company should be considered separately, because they each have unique circumstances. Let’s take the G.M. situation because it appears to be the most urgent. The possible repercussions of a G.M. meltdown are too frightening to contemplate.

Assuming that G.M.’s numbers are correct and that they desperately need $4 billion within the next 30 days, I believe the government should provide a loan or guarantee a loan for this amount. After President-elect Obama takes office, it will probably be necessary to increase the size of the loan. At that point, I believe the government should provide enough financing to guarantee that G.M. is solvent for another 12 months. This will give G.M. the time it needs to sell or shut down the Pontiac and Saturn lines and to consolidate other operations. G.M. has already announced its plans to take these steps.

At the end of one year, if G.M. cannot continue without further help from the U.S. government, it should undertake a prepackaged bankruptcy to radically alter its business model. G.M. would, in effect, have a one-year moratorium to get its house in order and hope that the economy recovers sufficiently to stimulate sales.

One provision that should be put into any advances or guarantees is that all government-backed loans are senior to every other form of financing on G.M.’s books — now or in the future. So if G.M. does go through bankruptcy in the future, the taxpayers’ contribution to this bailout will stand first in line after a restructuring.

Question

How do you believe Social Security can be reformed (or abolished, if you believe this) to benefit my generation (I’m 17 years old) as well as the current generation?

Answer

Plans such as Rep. Paul Ryan‘s (R.-Wis.) “Roadmap for America’s Future” contain several ideas for reforming Social Security that deserve serious consideration. The challenge is to preserve the benefits for retired citizens and those nearing retirement age, say 55 and older, while strengthening the retirement benefits for the remaining workers. This would include ensuring the solvency of the Social Security system with changes to the retirement age.

Contrary to conventional wisdom, the current financial crisis offers the perfect time to face this problem. The record deficit spending that has already been approved is sure to place enormous burdens on our children and grandchildren for years to come. Taking steps now to solve the Social Security dilemma (as well as the more pressing problems posed by Medicare and Medicaid) will help to bring clarity to the long-term outlook for our nation’s financial future.

Congress has already proven that it is reluctant to adopt even modest reform proposals when the economy is good, having defeated a bill in the 1990’s to add just one month per year to the retirement age for Social Security. We can’t afford to wait until the economy recovers to adopt reforms.

Question

Given how things have changed over the past 16 years, do you think that it would now be possible for a wealthy individual or a group of individuals to bankroll and organize a serious third party to challenge the Democrats and Republicans?

Answer

It is difficult to devise a scenario in which an individual or group of individuals could develop a viable third party capable of challenging the Democrats and Republicans; they have a vested interest in retaining a two-party system. A serious threat to the status quo would undoubtedly be met with subtle, or perhaps overt, roadblocks to formation. Look no further than the Federal Election Commission, which is totally controlled by Republicans and Democrats.

Question

You have been a strong advocate of a balanced budget for our nation. In our current times, with necessary bailouts happening everywhere, where would you start in order to eliminate the national debt America now has?

Answer

The reality of the situation is that eliminating the national debt requires that the federal government run a budget surplus each year. A surplus occurs during a year when the government collects more in taxes and other forms of revenue than it pays out in expenses and other expenditures. The difference between the amount the government collects and the amount it pays out is called a surplus, and that amount is used to pay down the national debt. Frankly, given the current financial crisis, there is no chance that the government will produce a surplus for the fiscal year that ends September 30, 2009. And it is highly unlikely that a surplus will occur during the following year.

One measure that could reduce the size of the deficit during the current year (and therefore reduce the amount of debt that will be added to the total debt) is to require that the budget for every department in the government will remain the same as the preceding year.

Question

Do you consider all deficit spending misguided? Surely there are some times when it is called for.

Answer

Classical economic theory calls for deficit spending by government when faced with prospects of recession and depression. The challenge, of course, is to spend money in a manner that will create the most benefit for the economy. This will prove to be an incredibly complex assignment and the subject of much debate.

Of course, wartime often requires deficit spending. World War II required huge amounts of deficit spending, for example. The difference between then and now, however, is that we ran budget surpluses after the war and paid off the debt.


Ben Straub

Alright my question about R.P. and integrity made it into the article. Come on Ross just humor me.

Cheyenne

Nicole,

it's also....
Main Entry: ascribe1
Part of Speech: v
Definition: to infer or conjecture ownership; to consider as belonging to
Etymology: Latin ad- + scribere 'to write'
Usage: transitive; used with to

So "we belong to" the theory that tax cuts boost the economy.

So, yeah, it does make sense.

MIchael Lofrano

Mr. Perot, has anyone been trying to sabotage a family affair as George Bush Sr. did with your daughter's wedding? Secondly, have you had any further contact with the aliens who abducted you and does it still hurt down there?.

Another marginalized liberal

Where are your pie charts Ross? Those pie charts were brilliant. The guy from Ben and Jerry's has been using the oreo cookie charts to exhibits exactly where we have been spending our money. Nothing has changed in twenty years except the size of our budget deficit. Lower our taxes in order to increase the governments revenues? Go figure.

Michael

The U.S. may typically find equilibrium in two-parties, but there are plenty of examples of historical U.S. elections with three or more parties in play (see wikipedia, historical U.S. Presidential elections). However, it would seem federal and state legislation has made it increasingly difficult for third parties to be elected in more recent times.

http://www.merriam-webster.com/dictionary/ascribe
I ascribe to webster online and find that Ross Perot used the word "ascribe" in a correct manner.

Plus, the phrase "ascribe to the theory" [as a full, unified phrase] gets 4,510 hits on Yahoo.

blitzed

you can knock RP all you want, but he didn't get to be a millionaire with his good looks.

the guy is a fiscal conservative and what he says mostly makes sense.

Another marginalized liberal

Ronald Reagan told us that big government was the problem and then proceeded to increase the size of our government ten fold while creating the largest budget deficit in the history of the world. George Bush Sr. told us to read his lips "No new taxes!". At least he had the good sense to realize that the interest that we are paying on these hugh budget deficits were a drain on our citizenry and therefore not good. Bill Clinton was able to balance the budget for a couple of years by privatizing more of our traditional government functions, however he didn't pay down our budget deficit. George W. reduced our taxes,especially for the rich, while taking us to war with two seperate countries and exploding our national debt. Any good businessman will tell you that it is not good to have too big a debt to equity ratio, if you want to stay solvent in a down market. It is no wonder that the credit markets seized up and we find ourselve bailing out banks with liquidity problems. Huge deficit spending has been the norm for the better part of the last twenty eight years. It is just a game of Monopoly for those too big to fail, while the majority of Americans' standard of living has continued to go down. Hopefully we are at the end of that era, and we can start reversing that trend. But evidently not until we spend more money to get us out of this recession. What ever happen to the simple notion of tax the rich and feed the poor?

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dbmorain

I wonder why he did not speak on a stimulis package more specifically. He merely hinted for some thing different... Would reviving the National Rail/ Bus Industry fill that bill, I wonder ??? It would certainly reach the entire country and the building of train engines, cars, rails, buses, the parts, depots, even the bullet trains and rails and provide millions and millions of good jobs in areas that could use most of those jobs lost and where the lay-offs occurred, wouldn't it ???expanding Amtrak and returning a rail/bus system to the towns and cities would take untold numbers of cars off the highways, saving tons of gas, reducing tons of polution and accidents, etc, etc..!!!

Harry

Obviously Perot does not believe that revenues are inversely proportional to tax rates. The Laffer Curve is just that - a CURVE. Tax rates that are too high hinder economic growth and reduce taxable income, thereby reducing tax receipts. Tax rates that are too low won't have any meaningful impact on economic growth and will result in reduced tax receipts. To suggest that Perot doesn't understand this is utterly disingenuous. Those who call this an "absurd shibboleth" or a "timeless con" either don't understand basic economic theory or, worse, are outright lying.

marnie

On Social Security and Medicare: retire at 65 or later; no early retirement. No cola until age 70. No unpaid for spousal benefits: couples double-dipping on one worker's contributions is stupid and discriminates against singles. Problem solved. Also, no dissability for until forty quarters are accrued. No survivor benefits; instead, every worker pays premiums on a term life policy whick renews automatically until he/she turns 70 when it expires.

Alternately, high earners based on lifetime earnings, take a lump sum at age65, amount at least what they put in in inflation adjusted dollars to maximum of $100,000. Tax all earnings from dollar one to total year by year.

Combine all the Medicare parts into one policy and charge premiums on a sliding scale based on lifetime earnings. Double it for couples. No more free loading spouses at expense of singles who worked all their lives.

john b

Defecit spending in itself, during the war didn't get us out of the depression. The fact that the rest of the world was totally ravaged by war and needed to be rebuilt (by US industry) is what boosted our economy.

Larry Hankamer

IRS figures prove that cutting taxes does not increase tax receipts (see IRS website). After Bush cut taxes, tax revenues dropped even though GDP continued to rise. It took four years for tax revenues to increase back above the levels before the cuts were enacted. Of course "tax cuts boost the economy". But it is a myth that cutting taxes increases revenues and raising taxes reduces revenues. I'm surprised that Mr. Perot would accept the fantasy that cutting taxes somehow magically increases tax revenues. I am for cutting taxes but only if spending is also cut. Dick Cheney said, "Ronald Reagan proved deficits don't matter". Now we have an $11 Trillion national debt plus a $1 Trillion deficit. Now more than 10% of our taxes goes to paying interest on the national debt. Those interest payments will be a drag on the economy for decades. Check the facts and use some common sense. IRS figures for the last 28 years prove that cutting taxes reduces revenues and increasing taxes increases revenues.

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George Hefferon

Vacuous. Why did you even both to publish this; there is no substance. He just reiterates the questions and states the obvious. You can do better than this. If there is no real insight then tell your readers and move on to someone with constructive ideas; no day old hash.

Geo from Jefferson

Social Security is essentially a cash system. Those currently working have money taken out of their pay. Most of this money is then given to retirees. As time goes by, projections, which are not entirely certain, indicate that soon (2020) all the money will need to go to retirees. Then, later still, future payments will be funded only to the 70 to 90% level. In other words, 70-90% of the future benefits are as certain as the safest cash investments. To me, especially in comparison with the stock market, this is NOT such a bad system. To this level, it is perfectly sustainable. Without question!

The only question is why economist refuse to describe 70-90% of the Social Security system accurately as a safe, cash system?

Because of this lack of accurate information:

* Most people falsely assume that the system won't be there at all.
* Most people are unaware that the system has been in surplus for the past 8 years, with the surplus spent in Iraq!!!

** Shame on economists for not making these points clear!

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Stan

These answers are not from the Ross Perot I love and remember. So who, exactly, wrote these replies for him? They are too bland for ole H. Ross to have crafted...

Does he have a "politically correct" speechwriter nowadays?

Anne from Texas

Social Security trust fund would be ok if Congress hadn't taken the FICA tax receipts into the General Fund and spent the h*ll out of it.

Jon

Perot forgets to mention he endorsed Bush, who pillaged the U.S. Treasury and poured all the cash into military contracts and corporate welfare.

Now Perot wants tax dollars to go to companies which, for generations, have been manufacturing the worst cars on the planet.

All this confirms the painfully obvious: Perot's bid for the White House had nothing to do with the national debt, and everything to do with self-promotion.

His net worth may be $5 billion more than mine, but at least I have the sense to buy a Japanese car.

Nicole

Hi Cheyenne (#22),

Thanks for your response. The OED definition that is closest to that is the following:

6. To reckon or count to, as a property or characteristic (rarely as a material possession); to consider or allege as belonging to, to claim for.

The following example of the above is provided by the OED:

"The use, which he ascribes to the Brain. "

While Perot says "We ascribe to the theory...," conventional usage has it that an agent would ascribe *something* to the theory--an agent wouldn't ascribe to the theory itself. The following would make sense:

We [Perot & Co.] ascribe _the promotion of tax policy enabling our fellow country-clubbers' ever-more-sybaritic standard of living to neocons enthralled by_ the theory that tax cuts boost the economy.

P.S. Where did you find your definition? Just curious--I'm into words, if you can't tell..

Nicole

Hi Michael (#25),

Thanks for continuing the conversation. Remember, though, Google is fallible (although I'm a Gfan). Case in point: Google returns 4,320 results when I entered the purposely misspelled "Ross Perrot" in the search box.

When I search for the unified phrase, "subscribe to the theory," Google delivers 30,400 results. In contrast, when I search for the unified phrase "ascribe to the theory," Google shows only 391 results, and it seems to me that "subscribe" or some synonym would be more apt (in place of "ascribe") for use in each of the instances given on the first page of Google results.

Wayne

I believe that Perot's use of "ascribe," when he presumably meant "subscribe," is a common mistake that shouldn't be held against him.