About the Speech

Everyone agrees that entitlement reform has to be involved in repairing America’s fiscal situation. But what does this mean, exactly? Entitlements are just promises made to us by our government–promises to take care of our pensions, ensure us a decent old age, provide medical help, help us get through unemployment spells, maintain high quality schools, and much more. Are these not worthy goals for a successful society? Do we want our government to renege on its promises after we have planned so much of our lives around them?

These are tough questions. They will not be solved by cutting a bit of military spending, by closing a few tax loopholes, by catching some welfare cheaters, or by looting billionaires.

Recent theoretical research in economics has made real progress in formulating and addressing questions like these. While the economists’ mathematics gets pretty fancy, the underlying logic is easy to describe and makes a lot of sense. Dr. Lucas' goal was to present the simple logic of economists’ proposed solutions and, most importantly, request the audience’s reactions to these new ideas.