Time to face up to our mountain of debt
ASK THIS | August 04, 2008
The former head of the GAO says the presidential candidates need to be pressed not just about their incremental budget proposals – but about their long-term plans to deal with an anticipated $53 trillion in current liabilities and unfunded promises.
By David Walker
It's time to reframe the parameters of our nation's fiscal debate.
When introducing new policy proposals, presidential candidates have finally learned to anticipate the inevitable question: "How do you plan to pay for it?" But oftentimes, after being provided with some rudimentary explanation, the reporters chasing after the candidates on the trail don't have the information on hand to take the exchange to the next level.
More recently, as home values and the markets have plunged, the dollar has weakened, and the deficit has ballooned, the quality of the discussion between the candidates and the press over economic policy has risen somewhat. Candidates' plans are now weighed in terms of whether they will worsen or ease the pressure on a government and a people who are increasingly cash-strapped.
Having spent nearly a decade as the government's chief auditor, I can tell you that today's level of discourse still falls woefully short. Given our current and projected financial condition, the nation's fiscal debate must be entirely reframed. It is no longer enough for a presidential candidate to simply offer a proposal and discuss how he or she plans to pay for it. As politically risky as even those discussions can be for a candidate, they are way too short-sighted.
The official national debt is approaching $10 trillion. But what our foundation calls the real national debt, including current explicit liabilities and unfunded promises for entitlement programs, is $53 trillion. That's $175,000 for each and every one of us. Social Security and Medicare alone account for $41 trillion of this staggering total and, thanks to compounding, their share grows by $2 trillion to $3 trillion per year on autopilot. Rising health care costs are outpacing overall economic and income growth and, absent dramatic and fundamental reforms, eventually could bankrupt the country. Based on our current entitlement and other spending, taxes would have to more than double over the next few decades in order for the government to pay its bills and deliver on its promises.
Given these conditions, here are a few questions for the candidates to jump-start the reframing of our fiscal debate:
Q. Do you believe that the nation will be able to grow its way out of the economic challenges it faces, without requiring additional spending cuts or tax increases beyond those you're already proposing? If not, what is your proposed approach for addressing the federal government's $53 trillion financial hole?
Q. Has the time come for a base-line review of all major spending programs and tax preferences, and if not, why not?
Q. Would you support the creation of an independent, bipartisan commission to review the nation's fiscal future and make recommendations to your administration and the next Congress about a range of reforms (e.g., budget controls, Social Security, health care, taxes)?
Q. Are you willing to make fiscal responsibility a priority, to not take entitlement reforms and tax increases off the table, and to commit the work on a public, bipartisan basis to address these challenges?
David Walker is president and CEO of the Peter G. Peterson Foundation. He was Comptroller General of the United States and head of the Government Accountability Office from 1998 to 2008.
08/15/2008, 09:11 AM
The people created the wealth of this nation and it has not been the Social Security crowd that put us into bankruptcy. Why should the people now have to pay with the loss of entitlements and by having to pay more taxes?
Why don't we end ALL aid and money to Israel instead which is extorted from us.
Why don't we force the candidates to promise that they will not bomb Iran?
The American people should not have to pay for neocon policies which we have been solidly against. We have already suffered by having our White House stolen and our Constitution trashed.
Along with the indignity of being brought down to Israel's level and the rounding up of an ethnic group and locking them away at Gitmo without due process and torturing them.
Why don't we demand that candidates promise to take money out of politics so that certain financial elites can't control our government with their money against our consent.