Is the beltway bankrupting America?
An interesting article from CBS News about the wake up tour US Comptroller General David Walker is on explaining the potential consequences of inaction in solving the government’s insolvency. Basically, current promised entitlements are far too big to be covered by current promised tax levels. If this continues, America will be facing a basic accounting problem: outflows will far exceed inflows, potentially bankrupting the government. This goes well beyond the micro debates surrounding specific topics like Social Security, but extends to all government entitlement programs, especially those involving health care, like Medicare and Medicaid. It’s an interesting read; here are some excerpts:
“I would argue that the most serious threat to the United States is not someone hiding in a cave in Afghanistan or Pakistan but our own fiscal irresponsibility,” Walker tells Kroft.
David Walker is a prudent man and a highly respected public official. As comptroller general of the United States he runs he Government Accountability Office, the GAO, which audits the government’s books and serves as the investigative arm of the U.S. Congress. He has more than 3,000 employees, a budget of a half a billion dollars, and a message he considers urgent.
“I’m going to show you some numbers…they’re all big and they’re all bad,” he says.
So bad, that Walker has given up on elected officials and taken his message directly to taxpayers and opinion makers, hoping to shape the debate in the next presidential election.
…”The fact is, is that we don’t face an immediate crisis. And, so people say, ‘What’s the problem?’ The answer is, we suffer from a fiscal cancer. It is growing within us. And if we do not treat it, it could have catastrophic consequences for our country,” Walker replies.
The cancer, Walker says, are massive entitlement programs we can no longer afford, exacerbated by a demographic glitch that began more than 60 years ago– a dramatic spike in the fertility rate called the “baby boom.”
…”If nothing changes, the federal government’s not gonna be able to do much more than pay interest on the mounting debt and some entitlement benefits. It won’t have money left for anything else – national defense, homeland security, education, you name it,” Walker warns.
Walker says you could eliminate all waste and fraud, and the entire Pentagon budget and the long range financial projections barely change, in what’s shaping up as an actuarial nightmare.
…Walker says we have promised almost unlimited health care to senior citizens who never see the bills, and the government already is borrowing money to pay them. He says the system is unsustainable.
“It’s the number one fiscal challenge for the federal government, it’s the number one fiscal challenge for state governments and it’s the number one competitive challenge for American business. We’re gonna have to dramatically and fundamentally reform our health care system in installments over the next 20 years,” Walker tells Kroft.
And if we don’t?
“And if we don’t, it could bankrupt America,” Walker argues.
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