SavvySugar

Warren Buffett Profits Heavily from TARP funds

Grandpa — Mon, 06 Apr 2009 13:04:01 -0700

Warren Buffett Profits Heavily from TARP funds
Richard Henry Lee

Warren Buffett promoted the Troubled Assets Relief Program (TARP), and lambasted the greed on Wall Street, yet he is one of the main benefactors of the TARP largesse according to a Sacramento Bee story.

Buffett endorsed Barack Obama for President last year, and Obama tapped Buffett to be a member of the candidate's economic team. Obama requently referred to Buffett's endorsement during the campaign as proof that he had the capability to deal with the troubled US economy.

Buffett's holding company, Berkshire Hathaway, profited from TARP in several ways according the the Bee story:
Overall, Berkshire owns more than $13 billion of stock in the top recipients of TARP funds – including Goldman Sachs Group Inc., US Bancorp, American Express Co. and Bank of America Corp., all considered by analysts to be in deep trouble before the federal infusion. The more the bailout props up these financial companies, the more secure Berkshire's investments.

That total, The Bee found, ranks Berkshire fifth among all investors in TARP-assisted companies. Berkshire's TARP holdings constitute 30 percent of its publicly disclosed stock portfolio. That proportion reflects at least twice as much dependence on bailed-out banks as any other large investor.

Buffett increased his bank holdings in September, while openly pressing Congress to pass the bailout.
The Obama administration has been blaming Republicans for the economic mess (and there is some culpability there too), yet the Democrats keep showing up with millions of dollars in their pockets. Senate Banking Chairman Chris Dodd received special treatment from Countrywide on his mortgage, Obama Chief of Staff Rahm Emmanuel received about $300,000 for very little work at Freddie Mac, former Clinton OMB Director Franklin Raines reaped about $90 million from Fannie Mae by inflating profits -- and the list goes on.

But what is really troubling is the chicanery that Warren Buffett and other Democrats employ to blame eveything on Wall Street when it is Washington that is largely to blame.

First Time The MSM Has Ever Ignored Warren Buffett

Grandpa — Tue, 10 Mar 2009 08:53:03 -0700

Kausfiles (Slate Magazine)
Obama Buffetted
First Time The MSM Has Ever Ignored Warren Buffett: The press accounts I've read have wildly underplayed Obama supporter Warren Buffet's criticism of the President on CNBC today. It's fairly pointed, and Buffett comes back to it, suggesting he has a message he's trying to deliver. [E.A.]:

BUFFETT: ...And, Joe, it--if you're in a war, and we really are on an economic war, there's a obligation to the majority to behave in ways that don't go around inflaming the minority. If on December 8th when--maybe it's December 7th, when Roosevelt convened Congress to have a vote on the war, he didn't say, `I'm throwing in about 10 of my pet projects ... [snip] ...

JOE: Yeah, but you might--might not have fixed...

BUFFETT: But I say...

JOE: You might not--you might not have fixed global warming the day after--the day after D-Day, Warren.

BUFFETT: Absolutely. And I think that the--I think that the Republicans have an obligation to regard this as an economic war and to realize you need one leader and, in general, support of that. But I think that the--I think that the Democrats--and I voted for Obama and I strongly support him, and I think he's the right guy--but I think they should not use this--when they're calling for unity on a question this important, they should not use it to roll the Republicans all.

JOE: Hm.

BUFFETT: I think--I think a lot of things should be--job one is to win the war, job--the economic war, job two is to win the economic war, and job three. And you can't expect people to unite behind you if you're trying to jam a whole bunch of things down their throat. So I would--I would absolutely say for the--for the interim, till we get this one solved, I would not be pushing a lot of things that are--you know are contentious, and I also--I also would do no finger-pointing whatsoever. I would--you know, I would not say, you know, `George'--`the previous administration got us into this.' Forget it. I mean, you know, the Navy made a mistake at Pearl Harbor and had too many ships there. But the idea that we'd spend our time after that, you know, pointing fingers at the Navy, we needed the Navy. So I would--I would--I would--no finger-pointing, no vengeance, none of that stuff. Just look forward. ..[snip] ...

BUFFETT: Well, I was going to mention to Joe that you've heard this comment recently from some Democrats recently that a `crisis is a terrible thing to waste.'

BECKY: Yeah.

BUFFETT: Now, just rephrase that and since it's, in my view, it's an economic war, and--I don't think anybody on December 7th would have said a `war is a terrible thing to waste, and therefore we're going to try and ram through a whole bunch of things and--but we expect to--expect the other party to unite behind us on the--on the big problem.' It's just a mistake, I think, when you've got one overriding objective, to try and muddle it up with a bunch of other things.

P.S.: He's against "card check." ("I think the secret ballot's pretty important in the country.")

Buffett says U.S. Treasury bubble one for the ages

Grandpa — Sun, 01 Mar 2009 15:16:03 -0800

Buffett says U.S. Treasury bubble one for the ages

NEW YORK (Reuters) - Warren Buffett, whose Berkshire Hathaway Inc sits on $25.54 billion (17.8 billion pounds) of cash, said worried investors are making a costly mistake by buying up U.S. Treasuries that yield almost nothing.
In his widely read annual letter to Berkshire shareholders, the man many consider the world's most revered investor said investors are engulfed by a "paralyzing fear" stemming from the credit crisis and falling housing and stock prices. Treasury prices have benefited as investors flocked to the perceived safety of the "triple-A" rated debt.
But Buffett said that with the U.S. Federal Reserve and Treasury Department going "all in" to jump-start an economy shrinking at the fastest pace since 1982, "once-unthinkable dosages" of stimulus will likely spur an "onslaught" of inflation, an enemy of fixed-income investors.
"The investment world has gone from underpricing risk to overpricing it," Buffett wrote. "Cash is earning close to nothing and will surely find its purchasing power eroded over time."
"When the financial history of this decade is written, it will surely speak of the Internet bubble of the late 1990s and the housing bubble of the early 2000s," he went on. "But the U.S. Treasury bond bubble of late 2008 may be regarded as almost equally extraordinary."
DISMAY OVER MORTGAGE PRACTICES
Investors' flight to quality followed years of excessive borrowing, especially in housing, and Buffett used his letter to make plain his dismay with a variety of mortgage lenders.
He said many ignored Lending 101 by not checking customers' ability to pay off home loans, or foisting "teaser" rates that reset to higher unaffordable levels.
In contrast, Buffett said, Berkshire's manufactured housing unit Clayton Homes had a 3.6 percent foreclosure rate at year end on loans it made, up from 2.9 percent in 2006, though more than one in three borrowers had "subprime" credit scores. The unit was profitable in 2008, earning $206 million before taxes, though earnings fell 61 percent, Berkshire said.
"The present housing debacle should teach home buyers, lenders, brokers and government some simple lessons that will ensure stability," Buffett wrote. "Home purchases should involve an honest-to-God down payment of at least 10 percent and monthly payments that can be comfortably handled by the borrower's income. That income should be carefully verified."
INVESTMENT YAWNS
Omaha, Nebraska-based Berkshire reduced its cash stake from $44.33 billion a year earlier largely by investing in preferred, convertible and fixed-income securities yielding 10 percent or more, and issued by familiar companies including General Electric Co and Goldman Sachs Group Inc.
Still, Buffett has said he would be comfortable taking Berkshire's cash stake down to $10 billion.
"It is curious how dismissive he is about cash, and yet Berkshire has a large cash position," said Bill Bergman, a senior equity analyst at Morningstar Inc. "The Berkshire enterprise is attractive in part because of the large cash positions. So maybe Buffett's prescriptions for the rest of us don't apply as generally to Berkshire."
Indeed, Buffett said that to fund new investments, he sold parts of some equity holdings he wanted to keep -- among them, oil company ConocoPhillips , drug company Johnson & Johnson and consumer products company Procter & Gamble Co.
Buffett said he "will not trade even a night's sleep for the chance of extra profits," and wanted Berkshire to have more than ample cash.
He also cautioned Treasury investors not to feel "smug" when they see commentators endorsing their investments.

"Beware the investment activity that produces applause," Buffett wrote, "the great moves are usually greeted by yawns."

The Estate Tax Explained: Who It Hits And Doesn't

Roarman — Fri, 04 Dec 2009 06:36:17 -0800

A philosophical question arose on the floor of the House of Representatives on Thursday: Should dead people have to pay taxes? Sounds funny, but the estate tax or, as Republicans call it, the "death tax," is one of the big debates between the two parties. And, as is usually the case, the truth is more complicated than either party makes it.

According to Ben Harris, a researcher with the Tax Policy Center whose job is to pore over IRS statistics and tax tables, "very, very, very few people" pay estate taxes.

"It hits about 2 out of every 1,000 estates, and these estates are the wealthiest of the wealthy," he says. "These are very high-income individuals who are affected by the estate tax."

The Tax Policy Center is a think tank that is a joint project of the Urban Institute and the Brookings Institution. It's been tracking the inheritance tax since President George W. Bush and his Republican Congress tried to kill it by putting the tax on a long slide into the ground. Over the past decade, the tax rate got progressively lower, while the amount of money a person had to be worth to pay it got higher. The idea was that by 2010 - poof! -there would be no more estate tax at all.

On the House floor Thursday, Texas Republican Louie Gohmert reminded lawmakers why his party wants to kill the estate tax. It's a moral issue, he said.

"After someone dies, and someone comes in and steals from them, we consider that reprehensible, that's just despicable," he said. "But when the government comes in - because we have the power to pass laws and legalize theft - it's OK."

But here's the catch: When Republicans wrote their law, to just end the estate tax would have cost too much. So they made their law temporary: 10 years of lower rates, and after that, it would snap back to 2001 levels. Their bet was that some future administration would fully repeal the tax beforehand.

It was a bad bet.

The past three years have seen a historic turnaround politically. Democrats took over Congress and the White House. And they, too, see estate taxes as a moral issue - just from the other side.

"Without the estate tax, you in effect will have an aristocracy of the wealthy, which means you pass down the ability to command the resources of the nation based on heredity rather than merit," Democrat Jared Polis of Colorado said, quoting billionaire Warren Buffett. "America is and should be a meritocracy."

Then again, almost no one - including Democrats - wants to go back to the higher, 2001 rates. Those rates would affect more modest estates - those worth $1 million and up - which include a lot of small farms and businesses.

So Democrats brought to the House floor something of a compromise: a permanent estate tax at this year's levels. That means that if a couple's estate is worth more than $7 million or an individual leaves behind more than $3.5 million, the money over that threshold is subject to a 45 percent tax.

The tax policy institute estimates that will affect about 6,000 estates this year - of which about 100 are small businesses or farms.

Debate on the House floor sounded contentious. (The prize for best quip goes to the Republicans who came up with "No Taxation Without Respiration.") But in the end, what passed was the essence of compromise. Republicans won the lowest estate tax rates in a decade, while Democrats can count on the $500 billion it will raise over the next decade.

Now, on to the Senate.

Source: http://www.npr.org/templates/story/story.php?storyId=121074648

Atheists are good people too

PinkNC — Sun, 15 Nov 2009 15:54:23 -0800

Bill and Melinda Gates with Warren Buffett, the three biggest charitable donors in history and not a religious thought between them. Not everybody needs a religion to do good.

“All religions lie to people in some form; the big lie is that those who do not follow the religion are not good people.”

“There are good people everywhere. No religion should claim themselves as having more monopoly on virtue over another.

Christians and Muslims run charities that proclaim their faith, but atheists do charitable work too.

Bill Gates runs a huge charity that has nothing to do with belief in God because he hasn't got any such beliefs. Doing good does not require a belief in life after death. Good people do good because they want to, and feel better for doing so. What more reasons need there be?”

*
*

Here’s the question: Can you trust a person that has NO religion to do good in the end?

Such as to be a doctor and save your life, a non religious neighbor that sees you sick or disabled and wants to help because they simply have a good heart, or a non religious person to teach your children. Can you see them as good….can you trust them without bias?

*
*

Finishing Our Work

stephley — Thu, 06 Nov 2008 10:14:15 -0800

By THOMAS L. FRIEDMAN

And so it came to pass that on Nov. 4, 2008, shortly after 11 p.m. Eastern time, the American Civil War ended, as a black man - Barack Hussein Obama - won enough electoral votes to become president of the United States.

A civil war that, in many ways, began at Bull Run, Virginia, on July 21, 1861, ended 147 years later via a ballot box in the very same state. For nothing more symbolically illustrated the final chapter of America’s Civil War than the fact that the Commonwealth of Virginia - the state that once exalted slavery and whose secession from the Union in 1861 gave the Confederacy both strategic weight and its commanding general - voted Democratic, thus assuring that Barack Obama would become the 44th president of the United States.

This moment was necessary, for despite a century of civil rights legislation, judicial interventions and social activism - despite Brown v. Board of Education, Martin Luther King’s I-have-a-dream crusade and the 1964 Civil Rights Act - the Civil War could never truly be said to have ended until America’s white majority actually elected an African-American as president.

That is what happened Tuesday night and that is why we awake this morning to a different country. The struggle for equal rights is far from over, but we start afresh now from a whole new baseline. Let every child and every citizen and every new immigrant know that from this day forward everything really is possible in America.

How did Obama pull it off? To be sure, it probably took a once-in-a-century economic crisis to get enough white people to vote for a black man. And to be sure, Obama’s better organization, calm manner, mellifluous speaking style and unthreatening message of “change” all served him well.

But there also may have been something of a “Buffett effect” that countered the supposed “Bradley effect” - white voters telling pollsters they’d vote for Obama but then voting for the white guy. The Buffett effect was just the opposite. It was white conservatives telling the guys in the men’s grill at the country club that they were voting for John McCain, but then quietly going into the booth and voting for Obama, even though they knew it would mean higher taxes.

Why? Some did it because they sensed how inspired and hopeful their kids were about an Obama presidency, and they not only didn’t want to dash those hopes, they secretly wanted to share them. Others intuitively embraced Warren Buffett’s view that if you are rich and successful today, it is first and foremost because you were lucky enough to be born in America at this time - and never forget that. So, we need to get back to fixing our country - we need a president who can unify us for nation-building at home.

And somewhere they also knew that after the abysmal performance of the Bush team, there had to be consequences for the Republican Party. Electing McCain now would have, in some way, meant rewarding incompetence. It would have made a mockery of accountability in government and unleashed a wave of cynicism in America that would have been deeply corrosive.

Obama will always be our first black president. But can he be one of our few great presidents? He is going to have his chance because our greatest presidents are those who assumed the office at some of our darkest hours and at the bottom of some of our deepest holes.

“Taking office at a time of crisis doesn’t guarantee greatness, but it can be an occasion for it,” argued the Harvard University political philosopher Michael Sandel. “That was certainly the case with Lincoln, F.D.R. and Truman.” Part of F.D.R.’s greatness, though, “was that he gradually wove a new governing political philosophy - the New Deal - out of the rubble and political disarray of the economic depression he inherited.” Obama will need to do the same, but these things take time.

“F.D.R. did not run on the New Deal in 1932,” said Sandel. “He ran on balancing the budget. Like Obama, he did not take office with a clearly articulated governing philosophy. He arrived with a confident, activist spirit and experimented. Not until 1936 did we have a presidential campaign about the New Deal. What Obama’s equivalent will be, even he doesn’t know. It will emerge as he grapples with the economy, energy and America’s role in the world. These challenges are so great that he will only succeed if he is able to articulate a new politics of the common good.”

Bush & Co. did not believe that government could be an instrument of the common good. They neutered their cabinet secretaries and appointed hacks to big jobs. For them, pursuit of the common good was all about pursuit of individual self-interest. Voters rebelled against that. But there was also a rebellion against a traditional Democratic version of the common good - that it is simply the sum of all interest groups clamoring for their share.

“In this election, the American public rejected these narrow notions of the common good,” argued Sandel. “Most people now accept that unfettered markets don’t serve the public good. Markets generate abundance, but they can also breed excessive insecurity and risk. Even before the financial meltdown, we’ve seen a massive shift of risk from corporations to the individual. Obama will have to reinvent government as an instrument of the common good - to regulate markets, to protect citizens against the risks of unemployment and ill health, to invest in energy independence.”

But a new politics of the common good can’t be only about government and markets. “It must also be about a new patriotism - about what it means to be a citizen,” said Sandel. “This is the deepest chord Obama’s campaign evoked. The biggest applause line in his stump speech was the one that said every American will have a chance to go to college provided he or she performs a period of national service - in the military, in the Peace Corps or in the community. Obama’s campaign tapped a dormant civic idealism, a hunger among Americans to serve a cause greater than themselves, a yearning to be citizens again.”

None of this will be easy. But my gut tells me that of all the changes that will be ushered in by an Obama presidency, breaking with our racial past may turn out to be the least of them. There is just so much work to be done. The Civil War is over. Let reconstruction begin.

Mars Reportedly Near Deal to Acquire Wrigley

tdsollog — Mon, 28 Apr 2008 09:37:55 -0700

(my personal comment: Mars is heaquartered in Hackettstown, NJ. I toured the plant... what I heavenly smell!)

Mars Reportedly Near Deal to Acquire Wrigley
By ANDREW ROSS SORKIN
Published: April 28, 2008
NY Times
http://www.nytimes.com/2008/04/28/business/28wrigley.html?th&emc=th

Mars, the makers of M&M’s, was near a deal last night to acquire the Wm. Wrigley Jr. Company, the chewing gum concern, for more than $22 billion, people involved in the talks said. The transaction would create a confectionery behemoth and could pressure rivals into a cascade of other mergers.

The Mars-Wm. Wrigley Jr. deal has an unusually famous financier: Warren Buffett. Mr. Buffett’s Berkshire Hathaway is helping finance the transaction for Mars, these people said. Mr. Buffett has a long history with iconic food and beverage businesses. He was an early investor in Coca-Cola and is already a candy owner in Sees Candies.

The deal is expected to be announced as early as Monday, these people said, though they cautioned that the transaction could still be postponed or collapse entirely.

The merger could spark a wave of further consolidation: Hershey and Cadbury Schweppes have held talks for years, but have been unwilling to consummate a deal. They may feel pressure given the scale and scope of a Mars-Wm. Wrigley Jr. combination, which would bring together a big stable of brands with worldwide distribution.

The sale price represents an enormous premium over Wm. Wrigley Jr.’s market value, which was $17.3 billion Friday. Spokesmen for Mars, Wm. Wrigley Jr. and Berkshire Hathaway could not be reached.

Among Wrigley’s brands are Extra, Orbit and Eclipse gums as well as LifeSavers and Altoids. Mars has M&M’s, Snickers, Starburst, Skittles and Twix. Mars also makes Uncle Ben’s rice products and pet food under the Pedigree brand.

Mars is a tightly controlled, privately held firm, one of the last in the confectionery business and one of the largest family controlled firms in the nation. It is controlled by the Mars family of northern Virginia. Forrest Mars Sr. created the recipe, and the first M&M’s were sold in 1941.

Wrigley, similarly has a storied history, though it went public in 1923. The Wrigley family, originally of Philadelphia, became a major presence in Chicago, where the company has its headquarters. The family’s name famously adorns the Chicago Cubs baseball stadium.

Durbin (D)cashed out during big stock collapse - Bloomberg News

Elllla — Mon, 15 Jun 2009 07:11:11 -0700

Durbin cashed out during big stock collapse
WASHINGTON | Asset sales came after meeting with Fed, Treasury chiefs
Comments

June 13, 2009

As U.S. stock markets plummeted last September, the Senate's No. 2 Democrat, Dick Durbin, sold more than $115,000 worth of stocks and mutual-fund shares and used much of the money to invest in Warren Buffett's Berkshire Hathaway Inc.

The Illinois senator's 2008 financial disclosure statement shows he sold mutual-fund shares worth $42,696 on Sept. 19, the day after then-Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke urged congressional leaders in a closed meeting to craft legislation to help financially troubled banks. The same day, he bought $43,562 worth of Berkshire Hathaway's Class B stock, the disclosure shows.

» Click to enlarge image

(AP)

Altogether, Durbin sold investments worth $116,000 in September. By Oct. 2, he had invested $98,046 in Omaha, Neb.-based Berkshire Hathaway, the form shows.

The Standard & Poor's 500 index plunged 4.7 percent last Sept. 15 after the bankruptcy of Lehman Brothers Holdings Inc. and Bank of America Corp.'s government-engineered takeover of Merrill Lynch & Co. By the end of October, the index had fallen 22.6 percent.

"Durbin was doing what a lot of other people were doing, taking a look at their savings" and seeing it "start to tank and trying to preserve some level of wealth by getting out of the market," said his spokesman, Joe Shoemaker.

Shoemaker said Durbin didn't capitalize on anything Paulson and Bernanke told congressional leaders at the Sept. 18 meeting.

Whatever information Paulson gave lawmakers wasn't secret or classified and was disclosed publicly the next day, Shoemaker said.

Bloomberg News

Medical bills underlie 60 percent of U.S. bankrupts: study

bluesarahlou — Thu, 04 Jun 2009 10:46:27 -0700

WASHINGTON (Reuters) – Medical bills are behind more than 60 percent of U.S. personal bankruptcies, U.S. researchers reported on Thursday in a report they said demonstrates that healthcare reform is on the wrong track.

More than 75 percent of these bankrupt families had health insurance but still were overwhelmed by their medical debts, the team at Harvard Law School, Harvard Medical School and Ohio University reported in the American Journal of Medicine.

"Unless you're Warren Buffett, your family is just one serious illness away from bankruptcy," Harvard's Dr. David Himmelstein, an advocate for a single-payer health insurance program for the United States, said in a statement.

"For middle-class Americans, health insurance offers little protection," he added.

The United States is embarking on an overhaul of its healthcare system, now a patchwork of public programs such as Medicare for the elderly and disabled and employer-sponsored health insurance that leaves 15 percent of the population with no coverage.

The researchers and some consumer advocates said the study showed the proposals under the most serious consideration are unlikely to help many Americans. They are pressing for a so-called single payer plan, in which one agency, usually the government, coordinates health coverage.

"Expanding private insurance and calling it health reform will fail to prevent financial catastrophe for hundreds of thousands of Americans every year," Dr. Sidney Wolfe of the Health Research Group at Public Citizen said in a statement.

About 170 million people get health insurance through an employer but President Barack Obama says soaring healthcare costs hurt the economy and force businesses to drop medical insurance for their workers.

CANCELED COVERAGE

"Nationally, a quarter of firms cancel coverage immediately when an employee suffers a disabling illness; another quarter do so within a year," the report reads.

Obama told Congress on Wednesday he was open to making mandatory health insurance part of the overhaul.

Neither Congress nor Obama are considering the kind of single-payer plan advocated by Public Citizen, Himmelstein and his colleague Dr. Steffie Woolhandler.

"We need to rethink health reform," Woolhandler said. "Covering the uninsured isn't enough.

"Only single-payer national health insurance can make universal, comprehensive coverage affordable by saving the hundreds of billions we now waste on insurance overhead and bureaucracy."

The researchers studied 2,134 random families who filed for bankruptcy between January and April in 2007, before the current recession began.

They used public bankruptcy court records and surveyed 1,032 people by telephone.

"Using a conservative definition, 62.1 percent of all bankruptcies in 2007 were medical; 92 percent of these medical debtors had medical debts over $5,000, or 10 percent of pretax family income," the researchers wrote.

"Most medical debtors were well-educated, owned homes and had middle-class occupations."

The researchers, funded by the Robert Wood Johnson Foundation, said the share of bankruptcies that could be blamed on medical problems rose by 50 percent from 2001 to 2007.

Patients with multiple sclerosis paid a mean of $34,167 out of pocket in 2007, diabetics paid $26,971, and those with injuries paid $25,096, the researchers found.

SOURCE

Why I’m Giving Away $1 Billion

starangel82 — Tue, 02 Jun 2009 07:25:14 -0700

The moment is overdue for us to become moral and worthy ancestors.
By Peter G. Peterson

In 2007 the company I cofounded, the Blackstone Group, held a most successful public offering. I found myself, at 81, an instant billionaire. I wish I could've called my father, a Greek immigrant who had spent most of his life running a 24-hour diner in Kearney, Neb. The news might have pleased him as much as my being the first Greek cabinet officer, which he never hesitated to tell perfect strangers. In the 1930s, when I was growing up, there was all this talk about millionaires like John D. Rockefeller and Andrew Carnegie. Now I was a millionaire 1,000 times over.

But immediately I began wondering: what do I do with $1 billion? The idea of trying to make the money grow felt empty to me. For my father, who saved or gave away so much of his modest income, the ultimate pejorative was "big spender." So buying a yacht was out of the question. I was also struggling over what to do with myself. I would be retiring from Blackstone, but my mind was still sharp and my energy was good. As my work commitments diminished, the phones gradually stopped ringing. The e-mails slowed. My schedule had too many blank spots. I was liberated. I was free. But I was joyless. I found my new life to be a kind of metaphor for my declining years-one might say a slow dying. I missed the frequent interactions with people I respected and enjoyed. I missed being needed. So I started looking at the lives of other billionaires. Almost all the ones I most admired were major philanthropists: Warren Buffett, Bill Gates, Mike Bloomberg, George Soros, Eli Broad-each with a passion to do good, each getting so much pleasure from giving their money away. I decided that's what I wanted to do. But to which worthy cause would I direct my money?

For the first time in my memory, the majority of the American people join me in believing that, on our current course, our children will not do as well as we have. For years, I have been saying that the American government, and America itself, has to change its spending and borrowing policies: the tens of trillions of dollars in unfunded entitlements and promises, the dangerous dependence on foreign capital, our pitiful level of savings, the metastasizing health-care costs, our energy gluttony. These structural deficits are unsustainable. Herb Stein, who served alongside me in the Nixon White House as chairman of the Council of Economic Advisers, once drily observed, "If your horse dies, I suggest you dismount." And yet, we keep trying to ride this horse.

Underlying these challenges is our broken political system. Our representatives, unlike our Founding Fathers, see politics as a career. As a result, they are focused not on the next generation, but on the next election. When the long-term problems are large and real, they anesthetize us, mislead us, divert us-anything to keep us from giving up something or having to pay for it. Too often, our political leaders are just enablers, co-conspirators in a disingenuous and greedy silence. Our children are unrepresented. The future is unrepresented. The moment is long overdue for us to become moral and worthy ancestors. So I decided to set up a different kind of foundation, one that would focus on America's key fiscal-sustainability challenges. The fact is, for most of these challenges, there are workable solutions. Our problem is not a lack of such options. It is a lack of will to do something about them.

Ultimately, I decided to commit $1 billion to the Peter G. Peterson foundation-the vast majority of my net proceeds from Blackstone. Why so much? Kurt Vonnegut once told a story about seeing Joseph Heller at a wealthy hedge-fund manager's party at a beach house in the Hamptons. Casting his eye around the luxurious setting, Vonnegut said, "Joe, doesn't it bother you that this guy makes more in a day than you ever made from Catch-22?" "No, not really," Heller said. "I have something that he doesn't have: I know the meaning of enough." I have far more than enough.

Peterson's memoir, The Education Of An American Dreamer, will be published by Twelve this month.

Source: Newsweek