Posted on 10/28/2006 1:16:36 PM PDT by NormsRevenge
AUSTIN, Texas - David M. Walker sure talks like he's running for office. "This is about the future of our country, our kids and grandkids," the comptroller general of the United States warns a packed hall at Austin's historic Driskill Hotel. "We the people have to rise up to make sure things get changed."
But Walker doesn't want, or need, your vote this November. He already has a job as head of the Government Accountability Office, an investigative arm of Congress that audits and evaluates the performance of the federal government.
Basically, that makes Walker the nation's accountant-in-chief. And the accountant-in-chief's professional opinion is that the American public needs to tell Washington it's time to steer the nation off the path to financial ruin.
From the hustings and the airwaves this campaign season, America's political class can be heard debating Capitol Hill sex scandals, the wisdom of the war in Iraq and which party is tougher on terror. Democrats and Republicans talk of cutting taxes to make life easier for the American people.
What they don't talk about is a dirty little secret everyone in Washington knows, or at least should. The vast majority of economists and budget analysts agree: The ship of state is on a disastrous course, and will founder on the reefs of economic disaster if nothing is done to correct it.
There's a good reason politicians don't like to talk about the nation's long-term fiscal prospects. The subject is short on political theatrics and long on complicated economics, scary graphs and very big numbers. It reveals serious problems and offers no easy solutions. Anybody who wanted to deal with it seriously would have to talk about raising taxes and cutting benefits, nasty nostrums that might doom any candidate who prescribed them.
"There's no sexiness to it," laments Leita Hart-Fanta, an accountant who has just heard Walker's pitch. She suggests recruiting a trusted celebrity — maybe Oprah — to sell fiscal responsibility to the American people.
Walker doesn't want to make balancing the federal government's books sexy — he just wants to make it politically palatable. He has committed to touring the nation through the 2008 elections, talking to anybody who will listen about the fiscal black hole Washington has dug itself, the "demographic tsunami" that will come when the baby boom generation begins retiring and the recklessness of borrowing money from foreign lenders to pay for the operation of the U.S. government.
"He can speak forthrightly and independently because his job is not in jeopardy if he tells the truth," said Isabel V. Sawhill, a senior fellow in economic studies at the Brookings Institution.
Walker can talk in public about the nation's impending fiscal crisis because he has one of the most secure jobs in Washington. As comptroller general of the United States — basically, the government's chief accountant — he is serving a 15-year term that runs through 2013.
This year Walker has spoken to the Union League Club of Chicago and the Rotary Club of Atlanta, the Sons of the American Revolution and the World Future Society. But the backbone of his campaign has been the Fiscal Wake-up Tour, a traveling roadshow of economists and budget analysts who share Walker's concern for the nation's budgetary future.
"You can't solve a problem until the majority of the people believe you have a problem that needs to be solved," Walker says.
Polls suggest that Americans have only a vague sense of their government's long-term fiscal prospects. When pollsters ask Americans to name the most important problem facing America today — as a CBS News/New York Times poll of 1,131 Americans did in September — issues such as the war in Iraq, terrorism, jobs and the economy are most frequently mentioned. The deficit doesn't even crack the top 10.
Yet on the rare occasions that pollsters ask directly about the deficit, at least some people appear to recognize it as a problem. In a survey of 807 Americans last year by the Pew Center for the People and the Press, 42 percent of respondents said reducing the deficit should be a top priority; another 38 percent said it was important but a lower priority.
So the majority of the public appears to agree with Walker that the deficit is a serious problem, but only when they're made to think about it. Walker's challenge is to get people not just to think about it, but to pressure politicians to make the hard choices that are needed to keep the situation from spiraling out of control.
To show that the looming fiscal crisis is not a partisan issue, he brings along economists and budget analysts from across the political spectrum. In Austin, he's accompanied by Diane Lim Rogers, a liberal economist from the Brookings Institution, and Alison Acosta Fraser, director of the Roe Institute for Economic Policy Studies at the Heritage Foundation, a conservative think tank.
"We all agree on what the choices are and what the numbers are," Fraser says.
Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America — Bill Gates, Warren Buffett and those Google guys included.
A hole that big could paralyze the U.S. economy; according to some projections, just the interest payments on a debt that big would be as much as all the taxes the government collects today.
And every year that nothing is done about it, Walker says, the problem grows by $2 trillion to $3 trillion.
People who remember Ross Perot's rants in the 1992 presidential election may think of the federal debt as a problem of the past. But it never really went away after Perot made it an issue, it only took a breather. The federal government actually produced a surplus for a few years during the 1990s, thanks to a booming economy and fiscal restraint imposed by laws that were passed early in the decade. And though the federal debt has grown in dollar terms since 2001, it hasn't grown dramatically relative to the size of the economy.
But that's about to change, thanks to the country's three big entitlement programs — Social Security, Medicaid and especially Medicare. Medicaid and Medicare have grown progressively more expensive as the cost of health care has dramatically outpaced inflation over the past 30 years, a trend that is expected to continue for at least another decade or two.
And with the first baby boomers becoming eligible for Social Security in 2008 and for Medicare in 2011, the expenses of those two programs are about to increase dramatically due to demographic pressures. People are also living longer, which makes any program that provides benefits to retirees more expensive.
Medicare already costs four times as much as it did in 1970, measured as a percentage of the nation's gross domestic product. It currently comprises 13 percent of federal spending; by 2030, the Congressional Budget Office projects it will consume nearly a quarter of the budget.
Economists Jagadeesh Gokhale of the American Enterprise Institute and Kent Smetters of the University of Pennsylvania have an even scarier way of looking at Medicare. Their method calculates the program's long-term fiscal shortfall — the annual difference between its dedicated revenues and costs — over time.
By 2030 they calculate Medicare will be about $5 trillion in the hole, measured in 2004 dollars. By 2080, the fiscal imbalance will have risen to $25 trillion. And when you project the gap out to an infinite time horizon, it reaches $60 trillion.
Medicare so dominates the nation's fiscal future that some economists believe health care reform, rather than budget measures, is the best way to attack the problem.
"Obviously health care is a mess," says Dean Baker, a liberal economist at the Center for Economic and Policy Research, a Washington think tank. "No one's been willing to touch it, but that's what I see as front and center."
Social Security is a much less serious problem. The program currently pays for itself with a 12.4 percent payroll tax, and even produces a surplus that the government raids every year to pay other bills. But Social Security will begin to run deficits during the next century, and ultimately would need an infusion of $8 trillion if the government planned to keep its promises to every beneficiary.
Calculations by Boston University economist Lawrence Kotlikoff indicate that closing those gaps — $8 trillion for Social Security, many times that for Medicare — and paying off the existing deficit would require either an immediate doubling of personal and corporate income taxes, a two-thirds cut in Social Security and Medicare benefits, or some combination of the two.
Why is America so fiscally unprepared for the next century? Like many of its citizens, the United States has spent the last few years racking up debt instead of saving for the future. Foreign lenders — primarily the central banks of China, Japan and other big U.S. trading partners — have been eager to lend the government money at low interest rates, making the current $8.5-trillion deficit about as painful as a big balance on a zero-percent credit card.
In her part of the fiscal wake-up tour presentation, Rogers tries to explain why that's a bad thing. For one thing, even when rates are low a bigger deficit means a greater portion of each tax dollar goes to interest payments rather than useful programs. And because foreigners now hold so much of the federal government's debt, those interest payments increasingly go overseas rather than to U.S. investors.
More serious is the possibility that foreign lenders might lose their enthusiasm for lending money to the United States. Because treasury bills are sold at auction, that would mean paying higher interest rates in the future. And it wouldn't just be the government's problem. All interest rates would rise, making mortgages, car payments and student loans costlier, too.
A modest rise in interest rates wouldn't necessarily be a bad thing, Rogers said. America's consumers have as much of a borrowing problem as their government does, so higher rates could moderate overconsumption and encourage consumer saving. But a big jump in interest rates could cause economic catastrophe. Some economists even predict the government would resort to printing money to pay off its debt, a risky strategy that could lead to runaway inflation.
Macroeconomic meltdown is probably preventable, says Anjan Thakor, a professor of finance at Washington University in St. Louis. But to keep it at bay, he said, the government is essentially going to have to renegotiate some of the promises it has made to its citizens, probably by some combination of tax increases and benefit cuts.
But there's no way to avoid what Rogers considers the worst result of racking up a big deficit — the outrage of making our children and grandchildren repay the debts of their elders.
"It's an unfair burden for future generations," she says.
You'd think young people would be riled up over this issue, since they're the ones who will foot the bill when they're out in the working world. But students take more interest in issues like the Iraq war and gay marriage than the federal government's finances, says Emma Vernon, a member of the University of Texas Young Democrats.
"It's not something that can fire people up," she says.
The current political climate doesn't help. Washington tends to keep its fiscal house in better order when one party controls Congress and the other is in the White House, says Sawhill.
"It's kind of a paradoxical result. Your commonsense logic would tell you if one party is in control of everything they should be able to take action," Sawhill says.
But the last six years of Republican rule have produced tax cuts, record spending increases and a Medicare prescription drug plan that has been widely criticized as fiscally unsound. When President Clinton faced a Republican Congress during the 1990s, spending limits and other legislative tools helped produce a surplus.
So maybe a solution is at hand.
"We're likely to have at least partially divided government again," Sawhill said, referring to predictions that the Democrats will capture the House, and possibly the Senate, in next month's elections.
But Walker isn't optimistic that the government will be able to tackle its fiscal challenges so soon.
"Realistically what we hope to accomplish through the fiscal wake-up tour is ensure that any serious candidate for the presidency in 2008 will be forced to deal with the issue," he says. "The best we're going to get in the next couple of years is to slow the bleeding."
Their basic message is this: If the United States government conducts business as usual over the next few decades, a national debt that is already $8.5 trillion could reach $46 trillion or more, adjusted for inflation. That's almost as much as the total net worth of every person in America — Bill Gates, Warren Buffett and those Google guys included.
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The alarm bells have been ringing for years ...
So, what did he say, or can't they be bothered to report it?
A long, long article, with lots of gloom and doom details, but not one bit of reporting on what the Comptroller General actually said.
Typical.
Thankfully, the Adults are in charge.
This is EXACTLY what politicians should be talking about in in election. Instead we are talking about sex lifes and MJF's tremors.
Walker is another timebomb appointed by Clintoon before they left with the White House silverware.
http://oregonmag.com/PBSGAO.htm
The News Hour:
Shocking Proof of PBS Bias
January 28, 2002 – The News Hour's Jim Lehrer opened and closed the program with his usual news summary. One of the show's first items was about the possibility that the G.A.O. (which he called a "watchdog" office) will sue the president and vice-president to gain release of the details of certain conversations they had with respect to ENRON, the energy company that recently folded.
Here is what Jim Lehrer did not mention during those two announcements. David M. Walker is the Comptroller General of the United States. He is the head of the General Accounting Office, the investigative arm of Congress. Walker is a late 90's Bill Clinton appointee whose previous job was as a partner at Arthur Andersen, LLP, ENRON’s accounting firm.
That's right. The GAO is investigating ENRON'S massive accounting irregularities, and the Comptroller General is a man who left his partnership in ENRON's accounting firm to become the head of the agency !! Hit this link and see for yourself. David Walker of the GAO
And, Jim Lehrer didn't think this information was relevant to the news item?
This is the smoking gun of mainstream media bias, folks. The blue dress. For Lehrer to begin and close with that item, but to leave David Walker out of it is outrageous! An insult to the nation, to the concept of justice and to his profession. PBS owes America an apology. Jim Lehrer ought to find a job he's good at. (LL)
Update: On January 31, the News Hour's award-winning reporter, Ray Suarez, did an expanded segment on this topic which included video of Mr. Walker making comments. Henry Waxman, a Democrat congressmen who supported the appointment of Walker, was also in this segment. No mention of Walker's Andersen/Enron ties was made. The lies and hypocrisy continue.
I would ask the questions..
..which side of the aisle is willing to put thru meaningful reforms and
.. which side is the one that got us bogged down in this social spending mess in the first place?
Then vote accordingly..
Dear God. I just spat beer out of my nose. Oprah pushing fiscal restraint? Yeah, maybe after she gets hit in the head by a frozen pig that just came flying out of Hell. Oprahcrats have never met an appropriations bill they didn't like. Except those pesky defense spending measures, because they aren't for the children.
Ping
Thanks, I suspected as much re: Walker..
I understand the need for debate and discussion and hopefully action to address these issues ,, that's all fine and good,, but would also question the timing of this piece.. for too many elected officials, these are 3rd rail issues unfortunately
Trick question because today there is little difference in the two parties. Congress showed no interest in SS reform and what's worse, passed a hige ramp up in socialist spending in order to pay off greedy seniors who think that they should get drugs on the cheap even though they never put money in to fund that particular benefit.
Ya got me. lol
Sometimes all we can try and do is shame folks to get them to come around,, unfortunately too many of those elected these days don't seem to shame well or much at all, imo.
Below is a link to reply I posted close to 4 years ago, when this Clintoon POS had his lawsuit against VP Cheney thrown out of court.
http://www.freerepublic.com/focus/f-news/803527/posts?page=11#11
The biggest mistake President Bush ever made was not purging fifth column RATS from his administration.
He tried his kickout lawsuit in 2002 agains VP Cheney for the same reason, the important 2002 elections. The voters ignored him, the MSM and the rats and voted in our house majority.
I'm waiting.
The article combines the current deficit with the shortfall in funds for Social Security, Medicare and Medicaid. That is very misleading. Bush tried to convince people that the entitlement programs were going to lead to disaster, and he tried to fix SS. That's what has to be done.
This is nothing more than election time propaganda from a Dem.
Have all those credit cards used in all Federal departments by the Bureaucrats been revoked? Has the Education Department ever cleared up its books? Is the Pentagon still paying $700.00 for a $5.00 hammer? Who is watching over the GAO? The Bureaucratic Army paid for by the tax payers, those who pay Federal Taxes, is almost larger than civilian employees - a very dangerous precedence for America.
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