Pete Peterson's 'The Education of an American Dreamer'

EXCERPT: The Education of an American Dreamer

Pete Peterson has lived the American Dream.

The son of Greek immigrants, Peterson grew up during the Great Depression, working in his family's 24-hour diner in a town smack in the center of America, Kearny, Neb.

"It's 1,733 miles to Boston. And 1,733 to San Francisco," Peterson said.

In Peterson's new memoir, "The Education of an American Dreamer," he writes about his humble beginnings and the many successes he's achieved since leaving his family's Nebraska home.

Peterson has held some of the most prestigious positions in the financial world. He was CEO of Lehman Brothers in the 1970s, President Nixon's secretary of commerce, chairman of the New York Federal Reserve, and co-founder of the Blackstone Group, a hedge fund that amassed a worth of $31 billion.

VIDEO: Pete Peterson says Americans need to sacrifice to reduce the countrys debt.

Through all that, Peterson said, he never forgot the lessons of hard work, sacrifice, and personal savings that he learned from his father. Armed with these lessons and $1 billion, Peterson has devoted himself to educating future generations that he worries will suffer the consequences of today's overspending.

"I visualize myself on a death bed," Peterson said on "Good Morning America." "And I visualize myself saying, 'You know, you enjoyed the American Dream for yourself. You don't think it's gonna be there for your kids, and so forth. And yet, knowing that and having all this money, you did nothing.' And I can't imagine a worse feeling than that."

The self-made billionaire shared his concerns for the future of the American economy and offered five solutions to reclaiming fiscal responsibility in the areas where he feels it is most needed: health care.

1. Develop a Health Care Budget

Peterson said he believes the United States spends far too much on health care.

"We're the only country that doesn't have a budget for health care," Peterson said. "They leave it to the states and Medicare to decide how to allocate [the money]."

Without a federal budget, Peterson described the system as "totally open-ended" and called the incentives "perverse."

2. Develop a Best Practices Method in Health Care

The current system encourages endless tests that, Peterson argued, are inefficient and costly.

"You [patients] don't care what kind of procedures and tests they do because it doesn't cost you anything," Peterson said.

But for the doctors, Peterson said, the increased chance for profits and the decreased chance of litigation make it worthwhile to conduct expensive, sometimes unnecessary procedures.

"We need to be more efficient and stop the over-prescribing of tests, surgical procedures," Peterson said.

3. Reform Open-Ended Tax Subsidies for Health Insurance to build an Incentive for the Consumer to Reduce Costs

Currently, Peterson said, the tax-free system does not allow patients to make decisions on a procedure's value and worth.

"There should be a progressive tax, based on salary that sets limits on how much health care you can deduct without paying taxes on it," Peterson said. He said there should be limits on how much of the employee's benefit is tax free, adding employees should have to pay taxes on some of their contribution so there is a built-in incentive to reduce costs.

4. Elderly Who Can, Should Pay for Their Own Health Insurance

Peterson said that able elderly people should pay for their own health insurance, arguing that this would allow us to take care of the poor while still having an incentive to reduce costs.

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