U.S. Comptroller General Warns the Nation of Economic Calamity
Dave Eberhart, NewsMax.com
Thursday, Aug. 3, 2006
The Comptroller General of the United States warns the nation will go broke within a generation - unless it takes radical steps now to rein in out-of-control federal spending.
In an exclusive interview with NewsMax, Comptroller David M. Walker, explained his mission: Save America from the brink of financial disaster.
Walker has revealed America's collision course in computer simulations that show balancing the budget in 2040 (under the status quo of spending like there's no tomorrow) could require cutting total federal spending by an incredible 60 percent - or raising federal taxes 200 percent over today's level.
Serving a 15-year appointed term that began when he took his oath of office on Nov. 9, 1998, this no-nonsense certified public accountant is the nation's chief accountability officer and head of the U.S. Government Accountability Office (GAO).
Walker has won plaudits from both Republicans and Democrats for his no-nonsense straight talk about the nation's current economic crisis.
In his wide-ranging interview with NewsMax, Walker offered a candid assessment of the problems and risks facing Americans over the next several decades.
Among his key assessments:
# Prescription Drugs:: Walker says that the prescription drug plan is the "poster case for what is wrong with Washington."
He notes that when Congress first took up the matter of Medicare prescription drugs, estimates placed the cost at $300 billion.
But he argues that both Congress and the administration simply downplayed or ignored the true costs of the program. Today, the nation will have to pay out for the program $8 trillion-plus in current dollar terms.
Walker also detailed that when the Medicare actuary of the Center for Medicare/Medicaid Services calculated the true costs of the program, he "was told he could not tell the Congress or else he might lose his job."
"That not only was unethical but it was illegal, and nobody has been held accountable for it," an angry Walker said.
# Defense Budget: Walker argues that Defense Department simply is out of control and that basic rules of accountability don't apply.
He said that although it received a whopping $500 billion in appropriations, the Defense Department "is the only agency in the federal government that cannot adequately account for its assets and its expenditures - and cannot withstand an outside financial statement audit."
Walker grades the agency with a "D" on "economy, efficiency, transparency, and accountability." He added, "And it has not been held accountable."
# The Nation's Debt: Walker says the United States risks losing its pre-eminence around the globe because of its growing status as a debtor nation.
He ominously notes that "last year was the first year since 1933 that Americans spent more money than they took home and, as you probably recall, 1933 was not a good year for the United States."
Because the United States has to rely on foreign central banks to finance its deficits, it places itself in a high-risk situation.
"It means that other players hold an increasing percentage of our nation's mortgage; and it means the debt service is going to go overseas rather than domestic; and it means that we will have less leverage on them with regard to economic, foreign policy and national security issues - and they will have more leverage on us."
# Entitlements: The United States must rein in entitlement programs or face economic woes, he argues.
Walker says that today the United States is "about 3 percent short of the GDP between what we are taking in and what we are spending, and it is going to get worse when the [baby] boomers start to retire - primarily because of entitlement programs.
"You can't solve the problem without fundamental reform of the entitlement programs. Medicare is going to require much more dramatic and fundamental reforms than Social Security because the problem is six to seven times greater than Social Security.
"It is going to take entitlement reform; it is going to take spend constraint; and it is going to take some revenue enhancements."
Walker's Mission
Walker's frequent refrain is simply, "The status quo is not an option!"
He's been telling his story to Congress, the media, and anyone else who will listen.
His globetrotting has included speaking appearances at Gresham College London, England; the London School of Economics; the Atlanta Rotary Club; the National Press Foundation; and the National Conference of State Legislatures - just to name a few.
Walker likes slide shows – to better facilitate the ominous graphs and charts that highlight his message.