I got a call today from a corporate communications staffer at The Travellers Companies, one of America’s largest property casualty insurance companies.
She told me that Travellers Chairman and CEO Jay Fishman has recently debuted as a LinkedIn Influencer, and he has a new blog post and video statement about a matter of great public concern: the federal budget deficit.
Might Business Insider might want to cover it?
Boy, would we ever. What’s more interesting than yet another CEO expressing Grave Centrist Concern about America’s Looming Budget Problems?
The deficit is “chief among” “the most pressing issues of our time,” says Fishman, who is apparently unaware of the existence of long-term unemployment.
“Based on the Congressional Budget Office’s latest projections, Social Security, Medicare, and Medicaid spending in 2022 will surpass all the revenues the federal government will collect this year,” he warns.
That’s true: Spending on a subset of government programs eight years from now will exceed government revenues today. Of course, the CBO also projects that federal revenues will rise from $US3.0 trillion this year to $US4.7 trillion in 2022, so it’s a pretty meaningless comparison.
If you wanted to make actually insightful observations from the latest CBO projections, you might note that federal debt is expected to start falling as a share of GDP in 2015, and the debt-to-GDP ratio will be roughly flat around 70% for most of the next decade. That is, debt is under control, not spiraling.
“Travellers chose to be vocal about the deficit because the stability and health of the economy is important to our business, our customers and to families pursuing the American dream,” adds Fishman. Indeed, the “Thought Leadership” segment of the Travellers website includes a statement on “America’s Debt Crisis.”
Of course, a debt crisis usually involves high interest rates, as government borrowing crowds out private investment and creditors worry about the government’s ability to repay. Since insurance companies make lots of fixed income investments, shouldn’t Fishman know that interest rates are extremely low? Why does he mistakenly believe that America faces a debt crisis?
It might have to do with this: Fishman made $US15.7 million in 2012. And like Fishman, the wealthiest 1% of Americans tend to be unhealthily obsessed with the federal budget deficit, rating it well above unemployment as a matter of public concern. Travellers does not have a “Thought Leadership” statement on the problem of long-term unemployment, which seems short-sighted, since people who lose their jobs and move back in with their parents probably do not buy renters’ insurance.
If Fishman wants to be a thought leader, he should get out of his bubble and realise that the need for modest medium-term fiscal adjustments is not “chief among” the problems faced by the vast majority of Americans.
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