The Hon. David Walker, former Comptroller General of the United States, was appointed by President Clinton and spanned both Democrat and Republican Administrations from 1998 to 2008. David is currently CEO of The Peter G. Peterson Foundation and brings his abundant knowledge, experience and now, new freedoms, to voice his opinions on our dire economic situation.
As the Chinese Dynasties rose and fell every 200 to 250 years we can find many correlations with America today in that cycle. Civilizations toiled hard at first, hit their peak at a little over the midway point (the industrial revolution for us) and then slowly started to decline. The population got overweight, lazy and decadent and had a sense of invincibility and superiority. The growing obese population of the United States of America supports this cyclical anthropological theory and is a physical manifestation of the excess fat that filters right throughout American society today... including in our national budget.
Historians later labeled the policies the Manchu Dynasty implemented 30 years prior to their fall as "too little, too late." It is our decisions today that will determine if historians reflect on the demise of America as "too partisan, too late."
There is hope though. We have two new tools available in our tool kit to beat this historic cyclical paradigm... mass media and an educated population. Fortunately David Walker is focused on using both of these tools to try to save the United States as it teeters on a financial cliff edge. It is with great honor that I welcome the Hon. David Walker to The Global Townhall.
Gabrielle Reilly: What are our biggest economic problems?
David Walker: The most immediate economic problem is to strengthen the economy and reduce unemployment. However, our greatest economic challenge is the need to address the $62 trillion financial hole the federal government was in as of 2009 and the related large and growing deficits that we face in the future due primarily to escalating health care costs and the retirement of the "baby boom" generation. This later so-called "structural deficit" represents the true threat to our ship-of-state. To address it we need to re-impose tough statutory budget controls and reform Social Security in 2011. We should also begin a process in 2011 that will result in a multi-year review, reengineering and reprioritizing of the base of the federal government to make it more future focused, results oriented, affordable and sustainable. We also need to take steps that will lead to comprehensive tax and health care coverage/cost reforms in 2013.
Gabrielle Reilly: You talk of our country suffering economically from partisan politics caused by implementing spending programs AND tax cuts. Can you explain to our readers your view on this?
David Walker: Too many of our current elected officials are on the far right or the far left from an ideological perspective. In the past that has resulted in tax cuts and spending programs that were not fiscally responsible. Washington adopted a "Whimpy" fiscal policy. Namely, I'll gladly make tough choices on Tuesday if you let me cut your taxes and/or increase spending today. But Tuesday seems to never come.
More recently, due to gerrymandering of Congressional districts and other factors, we have developed an ideological divide that has served to polarize Washington in connection with any attempts to address our fiscal and other key sustainability challenges facing the country. For example, too many Republicans believe that we can address our nation's longer-term structural deficits without raising taxes. Too many Democrats believe that we can address such deficits without reforming Social Security, Medicare and Medicaid. They are both wrong because the math doesn't come close to working unless "everything is on the table". There is a new four letter word in Washington, it's called "MATH".
Gabrielle Reilly: In your speech at the Business Executives for National Security luncheon in Kansas City, you mentioned the United States debt to foreign countries. Can you discuss this with our readers and how it could potentially impact us?
David Walker: Unlike at the end of World War II when the U.S. had no foreign debt, today almost half of the federal public debt is held by foreign lenders. Such a heavy reliance on foreign lenders is not prudent, nor is it in the longer-term economic, foreign policy, national security, and domestic tranquility interests of the U.S. You must pay attention to your foreign lenders. They have more influence over you and you have less influence on them.