Warren Buffett's ingenious deficit idea

The head of Berkshire Hathaway says he has a great plan: Tie lawmakers' political futures to the deficit.

By Kim Peterson Jul 8, 2011 2:34PM
Warren Buffett, in a recent interview with CNBC, offers one of the best quotes I've heard in all this drama about the debt ceiling:

"I could end the deficit in 5 minutes," he told Becky Quick. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."

They don't call him the Oracle for nothin'. Warren also had some rather harsh words for Republicans digging in their heels on the debt issue. We raised the debt ceiling seven times during the administration of President George W. Bush, Buffett said. But now it's become a hostage. You can hear more from Buffett in the following video interview.

Post continues below:
"You really don't have any business by playing Russian roulette to get your way in some other matter," he said. "We should be more grown up than that."

Here are some other choice quotes from Buffett about Washington and the ugly sausage making we've been witnessing:

"We had debt at 120% of GDP, far higher than this, after World War II, and no one went around threatening we're going to ruin the credit of the United States or something in order to get a better balance of debt to GDP. We just went about our business, and people did it in a cooperative way."

"You're playing with fire when you don't need to play with fire. We don't need to tell the rest of the world that anytime people in Congress start throwing a tantrum that we're not going to pay our bills."
34Comments
Jul 8, 2011 3:46PM
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They can end the deficit if they cut out there RETIREMENT PACKAGES, THERE HEALTH  CARE, THERE RAISES, THERE BONUSES, ETC,ETC, ETC. Why aren't they on the same plan as the workers who pay taxes. ALL POLITICIANS, FEDERAL STATE AND LOCAL SHOULD CONTRIBUTE AND PAY INTO SOCIAL SECURITY, MEDICARE, and retire the same way the working class have to do it. Let them live on SOCIAL SECURITY AND MEDICARE, IT IS NOT AN ENTITLEMENT AS THE POLITICIANS TRY TO PUT IT, MOST PEOPLE PAID INTO THIS PROGRAM SO WE WOULD HAVE SOMETHING WHEN WE WERE ABLE TO RETIRE. I was raised that you served your country because you wanted to make it better, NOT WHAT I CAN GET OUT OF IT AS IS BEING DONE TODAY.
Jul 8, 2011 5:14PM
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"…anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."

 

Love the quote but it’s all stick and no carrot. Congressmen obviously enjoy bringing pain and suffering to other people. Let’s add this carrot to the bill: anytime there’s a deficit of more than 3% of GDP their favorite lobbyists' entire net worth goes to the Treasury.

Jul 8, 2011 4:33PM
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Unfortunately congress is not willing to take responsibility for the problems they have caused and I don't think the pigs in Washington  are likely to kick the end out of their own trough to help solve the problems.  This goes for the Republicans and the Democrats. Perhaps we should call them all Demopublicans.
Jul 8, 2011 2:57PM
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"I could end the deficit in 5 minutes," he told Becky Quick. "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."

 

Regrettably, the "you" that must present this measure to a president, for it to pass into law, is the "you" that will not take responsibility: the members of the Congress. Given that it's Congressional irresponsibility (in holding out its hands, asking to be bought by lobbyists and the wealthiest citizens) that created the deficits and the national debt, it makes no sense to expect this solution to become reality.

 

The Congress refuses to pass legislation that would bar them from being whores for hire. There is therefore little reason to think they'd pass legislation that would bar them from the whorehouse.

Jul 9, 2011 6:03PM
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Warren Buffett has finally said something I agree with I like "You just pass a law that says that anytime there is a deficit of more than 3% of GDP, all sitting members of Congress are ineligible for re-election."

I still admire him at his ability of surrounding himself with good people. He then follows their solutions and advice.

Ted

Jul 8, 2011 3:54PM
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This is what happens when the foxes are guarding the hen house and the coyotes are running the show.

Hen house = our tax dollars
Foxes = Congress
Coyotes = Their corporate masters
Jul 11, 2011 2:23AM
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Right on Buffett.  I have an even better idea let's throw them all out of public office for getting us in this mess in the first place.
Jul 8, 2011 10:48PM
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The easiest way to fix our problem is simple. It's called term limits. Twelve years max for any of them that can now serve longer. Twenty five for Supreme Court Justices. That would really shake things up. Then, the lobbyist would advocate for states, not politicians. See!, it's easy. 
Jul 8, 2011 4:40PM
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Actually, it is somewhat feasible.  It would take a Constitutional amendment, which can be passed by 3/4 of the state legislatures.
Jul 8, 2011 3:37PM
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Sounds good in theory, but the problem is that in order for it to become law it will have to be passed by congress, which means they will have to pass a bill that will end their political career, so it won’t happen. 

 

Even if it did happen there would be a lot of fuzzy math presented by the losers in congress to show that it’s less than 3% of GDP no matter what the real numbers are. 

 

Some politicians don’t even know what the meaning of the word is is, so they’ll never be able to agree on how to measure the 3%.  It’s simple enough to me and anyone that knows arithmetic, but to the fuzzy math D.C. crowd it’ll be anything but simple.

Aug 16, 2011 11:46AM
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All government officials within any capacity should “enjoy” the same benefits that the rest of us do. There must be a “change” in our way of thinking about our government officials. It is difficult for the average American to hold any respect or to indulge in petty fighting among the different parties for their own posturing. If their positions were directly tied to their performance, we would all be meeting in the soup lines. I’m sure that we’ll see some of them there – eventually. As an average American that is finding it difficult to find even a part-time job with a college education, I ask all of you to consider that it is time for “our government” to stand up. I challenge you to risk as much as you have asked of us every day. If you cannot, you will not under any circumstances, gain the respect or stature that you have previously enjoyed. All of you in government have expected the American people to “lose” more and more – it’s your turn. Your salaries are paid by us, your benefits can be cut, and you can be replaced. All of you work for us and it’s time ALL of you realized it.

Aug 16, 2011 12:02PM
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To American citizens that agree with this idea: The power of technology is at your hands – use it. It’s not anyone positions fault. We’re Americans and we’re doing without a lot of things that all of us have paid to use in this country, including ALL Government Salaries and PERKS. We have the technology available to us to make each of your positions responsible and to replace all of you. You work for us – Democrat or Republican – isn’t stamped on your paycheck.

If you want to promote your Healthcare Plan, then use it. Same for any other “ideas” – but quit wasting our time posturing every four years. We, as people, need jobs, salaries, and our economy to heal quickly – without arguments. As many times as you “turn on the electric” to posture at a podium, you could deal with “1” item, such as All Government Officials utilizing the Government’s HealthCare Plan, effective immediately. By the way, you don’t need to pass a law to VOLUNTEER to with as the “rest” of us are.

Oct 19, 2011 11:25AM
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Warren's formula for success speaks for itself. The politics of this country...well, I guess they speak for themselves as well.

It's too bad when we are all held hostage to a bunch of out of touch, self serving, and sorry to say  pretentious @3$%^^.

The history of this country and all the patriots that made it must be looking down in disbelief at the way the lawyers and politicians have twisted the basic truths and foundation for this society to suit their fiefdoms.

Jul 8, 2011 5:40PM
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After WW2 there was one little difference though: no competition. 
Aug 17, 2011 4:52PM
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I agree with Mr Buffet, now try and get the law past. He also has said that he and many other very wealthy people such as himself do not pay a fair share in tax's, Bill Gates and many other very wealthy people agree  with him, but not the Republican party. They would rather bring the country to it's knee's and keep all that special interest money flowing into their pockets.
Jul 8, 2011 4:24PM
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So how far do we let them push us before we push back or, better yet push them all out? The politicians and their investors...I mean contributors run things and every government BUREAUCRACY operates under their direction – notice the appointees at the top – political donors!  So they keep pushing us until we have another Tea Party but, one with the guts to do something not the milque-toast unit operating now…

Jul 10, 2011 9:55PM
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Tongue out I'm sure he has effective solution but it's just about 50 years too late.Nerd
Oct 21, 2011 5:23PM
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Warren Buffet never said he and others did not pay their fair share of taxes; however, he did say he pay's a much lower tax rate than one of his employees as a percentage of income.

He left out the reason WHY, which is the fact that he pays taxes at a capital gains rate of 15% whereas his employee pays at a higher rate based upon the income tax tables -- thus he pays a lower percentage of his income than his employee -- but he does pay more dollars than the employee.

 
Dec 30, 2011 12:13PM
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Its only fair that the more you make the more you should have to pay. If I buy something at the store for $50.00 I pay the tax on $50.00 and if I buy something for $500.00 or $5000.00 I pay the tax on that amount. NOT I pay a lower amount because I have more to spend,or get tax loops. That's tax fraud. If I went to a company and told them " I am going to spend alot of money here, so give me a lower tax rate." They would laugh me out of the store! And this tax exempt crap has to stop! Its just creates more loop holes for people to scam. I have seen congress people get into cars with tax exempt plates. Your driving on the same roads as the rest of us!
Oct 24, 2011 9:59PM
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This is a good idea but it still has to operate within the frame work of the Constitution.
Ultimately, the individual states decide who gets put on the ballot.
Simple solutions are never that simple in practice.


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