The fundamental question looming over today's tepid economy is not when the crisis will come. It's whether policymakers in Washington have enough political will to craft a solution before it arrives.
That was the consensus among James W. McGlothlin '62, J.D. '64, L.L.D. '00 and the McGlothlin Forum Fellows David Boies, Chairman and Managing Partner of Boies, Schiller and Flexner LLP; the Honorable John Snow, 73rd United States Secretary of the Treasury and former CEO of CSX Corporation; and William C. Weldon, Chairman and CEO of Johnson & Johnson, during yesterday's public forum, "Is America's Engine Off Track?"
The open debate drew more than 500 students, faculty, staff and community members to the Mason School of Business, and was the capstone of the three-day McGlothlin Leadership Forum, which celebrated its inaugural run November 1-3.
With an aging American population, a growing national debt and increasingly divided political leadership, the McGlothlin Fellows agreed a two-pronged approach is essential to restore America's economy. Their suggestion: an increase in revenue coupled with a reduction in entitlement programs, such as Social Security and Medicare, which account for a third of the national budget. Both must happen.
"It's not rocket science," said Boise, who was selected as one of the "100 Most Influential People in the World" by Time Magazine in 2010. "We know what needs to be done, and if we don't increase revenue and reduce entitlement programs we are going down the road of a second-or-third-class economy."
Rising healthcare costs threatening future access to care was discussed at length during the hour-and-a-half session. Weldon, who leads more than 115,000 employees at J&J, said policymakers must reign in healthcare costs to ease the financial burden on the elderly.
People are living longer, said Weldon, and for people over the age of 65 the cost of healthcare is five times more expensive. Throw into that mix advances in medical technology, which offer people more life-extending options, along with aging demographics, and the result is a healthcare conundrum.
But a solution for the problem was a bit tougher to decipher. Boies said "It may mean there are life-prolonging procedures that are simply too expensive to offer. We're going to have to make those choices. The only question is are we forced to make those choices out of bankruptcy as a failed country, or are we going to get together and make those choices now."
On top of the financial challenges since the economic collapse in 2008, the Fellows discussed the polarization in Washington. Political will is needed from both parties to solve the economic problems, a daunting task as the middle threshold shrinks.
"If you look at Greece, you have a government who can't pay their bills and people lose faith in the financial market," said Snow, who as the treasury secretary steered the effort to pass the 2003 Jobs and Growth Tax Relief Act. "Governments that don't manage debt obligations fail."
Debate over how to increase revenue led to a plethora of ideas. Simplify the tax code; increase the rate of inflation; or institute a consumption tax. All philosophies were put on the table.
McGlothlin, who served as the moderator, pressed the Fellows about their thoughts on a gas tax. Although they all agreed it was a wonderful theory - and ought to be done - they quickly dismissed the idea as politically impossible.
"The hardest thing to get through the political pipeline is a gas tax," said Snow.
The role of small businesses, increased regulations and the demand for jobs were all topics analyzed during the session.
"We've got to improve the education system, and get people into sectors where there are jobs," said Boies. "We need to educate people for jobs of the future."
The panel's discussion was part of the Forum to engage students and faculty in discussion, debate and analysis of current issues facing the country. Many of the questions were submitted in advance and came from all over the country.
Before and after the plenary session, William & Mary students had the opportunity to participate in individual small classes with the Forum Fellows.
The forum, co-sponsored by the William & Mary Mason School of Business and Law School, was conceived by and named in honor of James W. McGlothlin, Chairman and CEO of The United Company, to prepare students to make a difference in the world by expanding their understanding of the vital roles of leadership and accountability in global political, legal, and economic systems.