With economic uncertainty continuing to engulf the world, many people are wondering where America’s finances are headed. Could the U.S. end up in economic circumstances similar to Greece, itself once the greatest civilization on the globe?
From 1998 to 2008, David Walker served as the U.S. Comptroller General, heading up the Government Accountability Office. Today, Mr. Walker is the CEO of the Comeback America Initiative and is also a board member of the political organization, American’s Elect. You might recall our CYInterview with the chief operating officer of American’s Elect, Elliot Ackerman [see here].
In a 60 Minutes segment, which aired in 2007, Comptroller General David Walker warned America that the government’s spending and debt trajectory was unsustainable over the long haul. Now, five years later, things are substantially worse than they were then. Immediate action must be taken to save America’s economy from catastrophe.
Featured columnist Jay Bildstein and I agree, that this CYInterview is arguably the most important segment we have ever done. David Walker says that America is two years away from where Greece was when its debt crisis began. If there was a CYInterview worth recommending to people you know, this is it.
You can listen to the entire CYInterview below or read the highlights:
Listen to the entire David Walker CYInterview:
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In explaining how the U.S. economy could end up in a dire debt crisis and what must be done to prevent it, David Walker says this:
“The truth is if you count total US Government debt as compared to many of the European nations that are in the news, we’re already worse than they are and we’re two years away from where Greece was when it had its crisis, two years from where Greece was when it had its crisis. Now we’re not Greece because we’re the largest economy, temporary, sole superpower and we have over 60 percent of the world’s global reserves and the US Dollar is over 60 percent of the world’s currency reserves. But we’re not exempt from the laws of prudent finance and when Europe starts getting its act together, people are gonna start looking at us and they’re not gonna like what they see.
It is imperative that we make meaningful progress in 2013. It’s taken us a number of years to get to where we are, it’s gonna take us a period of time to get to where we need to be. But we must start in 2013 and I come back to what I said, we need to make sure that the first three words of the Constitution come alive, we the people and we need to make sure that the next President of the United States whether it’s a second term for Barack Obama, whether it’s Mitt Romney or somebody else that they will make these issues a top priority. We need leadership more than anything else.”
Mr. Walker further elaborates that America does not have unlimited time to stabilize its finances:
“We’ve got more time than those countries in Europe ‘cause of who we are and what our position is in the world, but we don’t have unlimited time and it’s really important that this year’s presidential campaign plays a lot of attention on the issue of fiscal responsibility and sustainability as Ross Perot did 20 years ago, with a significant positive impact.”
When it comes to President Obama and the Republican candidates running for president, David says none of them have acceptable and credible plans for what the government’s budget should be:
“We now have our fourth year in a row of a trillion dollar plus deficit and you know, President Obama’s budget estimates that we will have a 700 billion dollar deficit ten years from now. That’s just not acceptable and frankly the Republican candidates who are running right now, they don’t have an acceptable and credible, you know budget proposal that will get debt as a percentage of the economy down to a reasonable and sustainable level and that’s really what the benchmark out to be. How can we get debt as a percentage of our economy down to a reasonable and sustainable level you know which is what it ought to be all about.”
The former Comptroller General discusses, what he calls, certain myths that have been put forward as solutions for America’s deficits and states what he believes needs to be done to prevent a debt crisis:
“There are certain myths out there about how we’re gonna deal with our structural deficits. The first one is we can grow our way out, it would take double digit real GDP growth for decades. It’s never happened. It’s not gonna happen. Secondly, we can inflate our way out. Inflation can reduce the burden of the current 15.3 trillion in debt, but that’s not our problem. Our problem is the 52 trillion dollars in unfunded obligations that aren’t on the ballot sheet Medicare, Social Security arranged by the commitment’s contingencies and they grow faster than inflation and faster than the economy when the economy grows because they’re driven by demographics and health care costs.
And you know, so those are two of the big four myths and the bottom line is we gotta make tough choices. We’re gonna have to renegotiate the social insurance contract. We’re gonna have to reduce defense and other spending and we’re gonna have to engage compliance in tax reform that will generate more revenues. And the longer that we wait to recognize that reality, the greater the chance of a debt crisis and the more dramatic and Draconian the changes are gonna have to be.”
So why join up with American’s Elect, a group that’s giving more people a chance to be part of the democratic process? Mr. Walker explains why he has aligned himself with the political group as a board member:
“The American people have become increasingly frustrated, frankly disgusted with the lack of progress. So what I’m trying to do is to in addition to stating the facts, speaking the truth and offering sensible solutions on how to put our finances in order, to shake up the political system and with regard to American’s Elect, it’s not a political party, it’s not a political movement. It is a political process. It will for the first time ever offer ballot access for to be determined presidential and vice presidential ticket that will be a unity ticket meaning that both people can’t be the same political party and that will shake up the current duopoly which is not effectively serving the interests of the American people.”
Additionally, Jay went into great detail with David about his plan for the president, vice president and Congress to take a 50% pay cut, among other things, in order for them to be held accountable and lead by example.
Jay has shared his proposal with political figures and commentators, here on CYInterview, over the last 12 months. Most of them agreed that our political leaders need to lead by example.
*Please see Jay Bildstein’s open letter to David Walker here.
You can find more information about American’s Elect at www.americanselect.org
You can find more information about the Comeback America Initiative at www.tcaii.org