You Can’t Take it with You

The turning point in my life came before I was born. It was the day in 1912 when my Greek immigrant father came to America. He came as a teenager, without a penny or a word of English, and with only a third-grade education.

He took a job as a railroad dishwasher. He worked, ate and slept in a steaming caboose and saved everything he made. With his savings he opened a restaurant, and kept it open 24 hours a day, seven days a week for 25 years in my hometown of Kearney, Neb. His hard work and thrift gave me extraordinary opportunities. Had I been born in a different country, at a different time, I would never have had the chances that gave me such good fortune.

I have lived the American Dream—I went to college, worked in the corporate world, served in government and became an investment banker. And that led to a second turning point, on June 21, 2007, at 9:30 a.m. That was the day the Blackstone Group—a private-equity, asset-management and financial-advisory firm that I cofounded—went public. In an hour I became an instant billionaire.

What to do with so much money? I have much more than enough, and there seems little prospect that I can take it with me. So again I turn to my father's example. When he had built a modest net worth, he gave generously to his old home in Greece and to the less fortunate in his beloved new home. Tears would come to his eyes when he sang "God Bless America." He so loved America for its possibilities.

I believe today that those possibilities are shrinking, endangering the American Dream. Personal myopia, political cowardice, fiscal fantasy and journalistic neglect are all at work. So I have chosen to put much of my wealth ($1 billion over the next several years and much of my remaining estate) into a new foundation, one that I hope will explain the undeniable, unsustainable and yet politically untouchable long-term challenges we face. Headed by The Honorable David M. Walker, who served as the comptroller general of the United States from 1998 to 2008, the foundation will propose workable solutions and build up the public will to put them into effect. I cannot think of anything more important than trying in this way to preserve the possibilities of the American Dream for my children's and grandchildren's generations, and generations yet to come.

Let me summarize three such challenges. First, as 78 million baby boomers reach retirement age, the costs of Social Security and Medicare will skyrocket, leaving us with unfunded promises of more than $44 trillion in today's dollars—equal to about three times our entire gross domestic product. Income taxes would have to double to pay for it—an unthinkable burden.

Second, our current-account deficits are unprecedented, fed by record trade deficits. Such dependence on foreign capital is dangerous. America as a country, and Americans as a people, must be persuaded to save more.

Third, our health-care costs are metastasizing. We already spend more than twice as much per capita as other developed nations, with no appreciable differences in health outcomes or longevity. These ballooning costs threaten the very competitiveness of American industry.

These challenges all require sacrifice. That means everyone. We fat cats will have to pay more taxes. The government will have to spend less. Everyone will have to save more. I'm not sure if we remember how to give up something for the long-term general good. Nor do we hear calls for sacrifice from our leaders. Our lawmakers are enablers, either joining us in the state of denial or trying to anesthetize us. But if we can learn to face the future realistically, everyone will benefit from a more robust, sustainable economy.

The "Greatest Generation" that lived through the Depression of the 1930s and World War II confronted, overcame and paid for challenges more sobering than those we face today. We can do it again. I refuse to believe that we have become so selfish and self-absorbed that we don't care about our children's future and America's leadership in the world.

How do we as a country, and Americans as a people, learn to save more and spend less? How do we educate the young about the crisis they will face if things aren't changed, and then move them to do something about it? Or will it take a real and very costly crisis to force us into action?

We need to go where the young people are: new media, bloggers, YouTube, Facebook, MySpace, MTV, and networks and Web sites that have not even been invented, and that is what my foundation will try to do. We will sponsor the production of films that educate people about the perils America faces (I have been impressed with what Al Gore accomplished with "An Inconvenient Truth"). We will have youth summits to get young leaders engaged in the process. Maybe someone should develop an AAYP, an American Association of Young People, to counteract the lobbying power of the American Association of Retired Persons. There are, of course, many other groups we must reach. How best do we energize the business community? Tom Friedman of The New York Times called us MIAs, "missing in action" on these daunting challenges. We have a huge stake in tomorrow's economy. How do we convince the media that the future is worth covering?

These challenges have hung over our economy for years. Others have tried to sound the alarm. I know that the odds of success are daunting. Yet given what is at stake and what I owe this remarkable country, I, and we, have no alternative but to try. As we move forward, we need to remind ourselves of the words of Dietrich Bonhoeffer, the German pastor who was instrumental in the resistance movement against Nazism. "The ultimate test of a moral society is the kind of world it leaves to its children," he said.

It is time we become moral and worthy ancestors.