Warren Buffett explains how to pay down the US national debt

Posted on 24 January 2012 with no comments from readers

Warren Buffett and Republican Congressman Scott Rigell spoke with Bloomberg Television’s Betty Liu in Omaha during their first in-person meeting following Rigell’s pledge to give 15 per cent of his salary to help pay down the national debt.

Buffett said he would donate 15 per cent of his income if 10 per cent of Congress would, but that donations are ultimately insufficient and ‘what is effective is changing the law.’

Buffett on Mitt Romney’s 15% tax rate:

‘Exactly what I expected. He makes money the way I do. He makes money by moving around big bucks, not by straining his back and going to work, cleaning the toilets or whatever it may be. He makes it shoving around money.

‘I make it shoving around money. If you look at the 400 highest incomes in the United States, the average is $220 million. Something like 90 of them are effectively unemployed.

‘They have no earned income, and that number has gone up over the years. That will not solve the budget deficit, what I’m talking about. The truth is, I am paying a tax rate less than when I was making $15,000 a year.’

Buffett on the Republican presidential candidates and their tax plans:

“I think Republicans, like Democrats, have trouble breaking ranks, particularly when they’re running for election. I do not know what they would do if they got in any way. There is history that shows campaign promises to not end up being law…somebody has to come forth.

‘One way or another, we have to get this down to a place where the average deficit does not run two per cent of GDP. That probably involves numbers around 19 to 20 per cent on revenues. Almost everyone agrees on that, they just do not want to be the ones to step forward.

‘I will cheer for the Republican or Independent or Democrat who comes up with a plan like that. You can argue about things around the edges, but then you have something that is workable. What we have now is not workable.’

Buffett on whether Romney has better experience than Obama:

‘If you look at the leaders of the past, Roosevelt, Lincoln, the great leaders — they come from all different backgrounds. What is required is a real belief in what this country can do, and it can do it, and then the ability to garner support which will take support from both sides of the aisle. That will happen. I am optimistic about that happening, but I just hope it would happen quicker than it is happening.’

Buffett on whether he sees validity in Gingrich’s recent attacks on Romney:

‘Romney did a lot of things in the private sector that are perfectly legitimate. I do not like buying businesses with lots of debt, but there is nothing immoral about it. In some businesses, they hired more people, in others they let people go… I see nothing specific about him. I think his tax rate is too low, but that is the fault of Congress, not his fault.’

Buffett on supporting President Obama’s millionaires tax:

‘My general theory is you should have a tax system where those making millions and millions of dollars, who are paying a much lower rate for one reason or another, get moved up to the rate that people think they are paying, in the mid 30’s.

‘There are about 80,000 taxpayers within that group paying that lower percentage of taxes. I would move those people up — one of whom is me and another is Governor Romney. Move them up to the mid 30’s where most of the people are.’

Buffett on his challenge:

‘That was more symbolic. We have a $1.20 trillion deficit. Contributions are not going to make a big difference. I think the American public wants to see a sign of any kind that the members of Congress take this as seriously as they should.

‘It is it is symbolic and it says, we are going to get to work on this. It is not that contributions will amount to anything significant — but it draws attention to it. The American people want to believe in Congress, but they do not believe in Congress. They see this important issue getting pushed off, each side blaming each other. I do not want to look back at all, I just want to look forward.’