With the political season in full swing, I thought it would be a good idea to take a look at a brewing problem that none of the candidates seem willing to confront.
It’s the national debt, stupid.
And it is a problem that will swamp the U.S. economy in the not too distant future, leaving a massive bill that can’t possibly be paid by our children and grandchildren.
So here’s a glimpse into a future that we can ill afford.
It comes courtesy of David M. Walker, the nation’s chief accountability officer and head of the U.S. Government Accountability Office.
Take a look:
Walker, by the way, has been beating this drum for years now.
In fact, I wrote about him and his efforts to sound the alarm in a piece that ran in Gold World on November 15, 2006 entitled: Baby Boomers…..or Baby Doomers?
Of course, since then the crisis has only gotten worse.
Here’s the article.
“Continuing on this unsustainable fiscal path will gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our national security”
David M. Walker- Testimony before Senate Budget Committee February 15, 2006
For David M. Walker, standing outside the walled citadel preaching his gloomy fiscal warnings to anyone who will listen is nothing new. It is struggle that he has been at for quite some time and until recently he has done so practically in the dark.
But Mr. Walker is certainly more than just some run-of-the-mill doom-and-gloomer. He is the nation’s chief accountant and more than anybody else he knows exactly what he is talking about. He has to. It’s his job and he knows it to a tee.
Only the seventh Comptroller General of the United States since the Government Accounting Office was created in 1921, Walker heads up the nonpartisan overseer of government operations.
He is, in short, the nation’s chief number cruncher, and the truths that those numbers tell him, he says, mean nothing but gray skies ahead for the American economy—if not ruin.
“The federal government is on a burning platform and the status quo way of doing business is unacceptable,” Walker says.
It is a message that is so important to him and the future of his grandkids that he is no longer content to be simply a voice in the wilderness. He has actually taken his message on the road.
It started over a year ago, and since then he has been an integral part of the “Fiscal Wake-Up Tour” sponsored by the Concord Coalition. It’s a traveling group of budget watchdogs-liberals and conservatives alike.
And while they certainly disagree over how to solve our growing fiscal dilemma, they speak in one voice concerning its existence. It is not only real, they say, but getting nearer every day.
At the core of their contention is the runaway deficit spending at the hands of politicians who continue to spend without considering the inevitable consequences for future generations.
And in unison they say this: If the U.S. Government continues its ways, our national debt will balloon from $8.5 trillion today to nearly $11.2 trillion by 2010-nearly $38,000 for every man, woman and child. Left alone even longer, it could grow to a staggering $46 trillion or more over the next couple of decades.
But it is not just deficit spending that will lead to our eventual woes; it is demographics-specifically the baby boomers-that will overwhelm the government’s ability to pay.
When they hit retirement age, Walker says, “We will face something unprecedented in the history of this country. It’s called a demographic tidal wave. And we are not prepared.”
And hit they will.
In fact, the leading edge of the baby boom hits age 62 in 2008 and can take early retirement. It’s only part of a 22-million-member group set to further burden the system by 2020.
But this initial wave will be nothing compared the strain that Medicare will eventually cause. It, after all, is our biggest fiscal problem and it will begin to break us as early as 2011, when those same boomers hit 65 and become eligible for the program.
“We face large and growing structural deficits largely due to new demographic trends and rising health care costs,” Walker said. “We cannot simply grow our way out of the problem.”
The result of inaction, Walker says, not only threatens our standard of living but could lead to a potential “Argentina scenario”-as in default.
It is also a prospect that could also lead to much higher interest rates in the event that foreign creditors lose their enthusiasm for financing our growing debt structure. That could lead to an economic catastrophe, as the higher cost of borrowing would bury the middle class.
Some economists even predict that the government would resort to printing money to pay off its debts, causing runaway inflation.
But even through all of his fiscal and demographic gloom, Walker continues to preach and even remains optimistic.
“One of the things I have found over the years,” Walker says, “is that the American people are a lot smarter than people realize, if they are told the facts. If you can provide the facts and speak the truth to the American people, they will get it.”
But until they do, Walker and his merry band of watchdogs will continue to travel, speaking about the numerical truths that may someday bring us down.
“The status quo is not an option,” Walker says.
Let’s hope that somebody is listening.
Especially those clowns behind the walls of the political citadel.