B
Bothrops Alticola
Guest
http://www.cbsnews.com/stories/2007/03/01/60minutes/main2528226.shtml
(CBS) When the stock market plunges like it did this week, everyone
pays attention. The man you're about to meet says hardly anyone is
paying attention to what really threatens our financial future. Like
an Old Testament prophet, David Walker has been traveling the country,
urging people to "wake up before it's too late."
But David Walker is no wild-eyed zealot. As Steve Kroft reports, David
Walker is an accountant, the nation's top accountant to be exact, the
comptroller general of the United States. He has totaled up our
government's income, liabilities, and future obligations and concluded
the numbers simply don't add up. And he's not alone. Its been called
the "dirty little secret everyone in Washington knows" - a set of
financial truths so inconvenient that most elected officials don't
even want to talk about them, which is exactly why David Walker does.
--------------------------------------------------------------------------------
"I would argue that the most serious threat to the United States is
not someone hiding in a cave in Afghanistan or Pakistan but our own
fiscal irresponsibility," Walker tells Kroft.
David Walker is a prudent man and a highly respected public official.
As comptroller general of the United States he runs he Government
Accountability Office, the GAO, which audits the government's books
and serves as the investigative arm of the U.S. Congress. He has more
than 3,000 employees, a budget of a half a billion dollars, and a
message he considers urgent.
"I'm going to show you some numbers...they're all big and they're all
bad," he says.
So bad, that Walker has given up on elected officials and taken his
message directly to taxpayers and opinion makers, hoping to shape the
debate in the next presidential election.
"You know the American people, I tell you, we've been to 13 cities
outside of Washington with the fiscal wake up tour. They are
absolutely starved for two things: the truth, and leadership," Walker
says.
He calls it a fiscal wake up tour, and he is telling civic groups,
university forums and newspaper editorial boards that the U.S. has
spent, promised, and borrowed itself into such a deep hole it will be
unable to climb out if it doesn't act now. As Walker sees it, the
survival of the republic is at stake.
"What's going on right now is we're spending more money than we make...
we're charging it to credit card...and expecting our grandchildren to
pay for it. And that's absolutely outrageous," he told the editorial
board of the Seattle Post Intelligencer.
You have heard this before, from Ross Perot 15 years ago. You might
have even thought the problem had been solved, when President Clinton
announced, "Tonight, I come before you to announce that the federal
deficit ... will be simply zero."
"Well, those days are gone. We've gone from surpluses to huge deficits
and our long range situation is much worse," Walker says.
"President Bush would argue that the economy is in pretty good shape,
unemployment is down, the deficit is actually less than expected,"
Kroft remarks.
"The fact is, is that we don't face an immediate crisis. And, so
people say, 'What's the problem?' The answer is, we suffer from a
fiscal cancer. It is growing within us. And if we do not treat it, it
could have catastrophic consequences for our country," Walker
replies.
The cancer, Walker says, are massive entitlement programs we can no
longer afford, exacerbated by a demographic glitch that began more
than 60 years ago-- a dramatic spike in the fertility rate called the
"baby boom."
Beginning next year, and for 20 years thereafter, 78 million Americans
will become pensioners and medical dependents of the U.S. taxpayer.
"The first baby boomer will reach 62 and be eligible for early
retirement of Social Security January 1, 2008. They'll be eligible for
Medicare just three years later. And when those boomers start retiring
in mass, then that will be a tsunami of spending that could swamp our
ship of state if we don't get serious," Walker explains.
To illustrate their impact, he uses a power point presentation to show
what would happen in 30 years if the U.S. maintains its current course
and fulfills all of the promises politicians have made to the public
on things like Social Security and Medicare.
What would happen in 2040 if nothing changes?
"If nothing changes, the federal government's not gonna be able to do
much more than pay interest on the mounting debt and some entitlement
benefits. It won't have money left for anything else - national
defense, homeland security, education, you name it," Walker warns.
Walker says you could eliminate all waste and fraud, and the entire
Pentagon budget and the long range financial projections barely
change, in what's shaping up as an actuarial nightmare.
Part of the problem, Walker acknowledges, is that there won't be
enough wage earners to support the benefits of the baby boomers. "But
the real problem, Steve, is health care costs. Our health care problem
is much more significant than Social Security," he says.
Asked what he means by that, Walker tells Kroft, "By that I mean that
the Medicare problem is five times greater than the Social Security
problem."
The problem with Medicare, Walker says, is people keep living longer,
and medical costs keep rising at twice the rate of inflation. But
instead of dealing with the problem, he says, the president and the
Congress made things much worse just three years ago when they
expanded the Medicare program to include prescription drug coverage.
"The prescription drug bill was probably the most fiscally
irresponsible piece of legislation since the 1960s," Walker argues.
Asked why, Walker says, "Well, because we promise way more than we can
afford to keep. Eight trillion dollars added to what was already a 15
to $20 trillion under-funding. We're not being realistic. We can't
afford the promises we've already made, much less to be able, piling
on top of 'em."
With one stroke of the pen, Walker says, the federal government
increased existing Medicare obligations nearly 40 percent over the
next 75 years.
"We'd have to have eight trillion dollars today, invested in treasury
rates, to deliver on that promise," Walker explains.
Asked how much we actually have, Walker says, "Zip."
So where's that money going to come from?
"Well it's gonna come from additional taxes, or it's gonna come from
restructuring these promises, or it's gonna come from cutting other
spending," Walker says.
He is not suggesting that the nation do away with Medicare or
prescription drug benefits. He does believe the current health care
system is way too expensive, and overrated.
"On cost we're number one in the world. We spend 50 percent more of
our economy on health care than any nation on earth," he says.
"We have the largest uninsured population of any major industrialized
nation. We have above average infant mortality, below average life
expectancy, and much higher than average medical error rates for an
industrialized nation," Walker points out.
Walker says we have promised almost unlimited health care to senior
citizens who never see the bills, and the government already is
borrowing money to pay them. He says the system is unsustainable.
"It's the number one fiscal challenge for the federal government, it's
the number one fiscal challenge for state governments and it's the
number one competitive challenge for American business. We're gonna
have to dramatically and fundamentally reform our health care system
in installments over the next 20 years," Walker tells Kroft.
And if we don't?
"And if we don't, it could bankrupt America," Walker argues.
You're probably expecting to hear from someone who disagrees with the
comptroller general's numbers, projections, and analysis. But hardly
anyone does. He is accompanied on the wake-up tour by economists from
the conservative Heritage Foundation, the left-leaning Brookings
Institution, and the non-partisan Concord Coalition. The only
dissenters seem to be a small minority of economists who believe
either that the U.S. can grow its way out of the problem, or that
Walker is over-stating it.
"The Wall Street Journal for example calls you 'Chicken Little,'
running around saying that the 'sky is falling, the sky is falling,'"
Kroft remarks.
"Unfortunately they don't get it. I don't know anybody who has done
their homework, has researched history, and who's good at math who
would tell you that we can grow our way out of this problem," Walker
replies.
Federal Reserve Chairman Ben Bernanke validated much of Walker's take
on the situation at congressional hearings this year, and so did
ranking Republicans and Democrats on the Senate Budget Committee.
Senator Kent Conrad of North Dakota is the Chairman.
Sen. Conrad thinks David Walker is "providing an enormous public
service."
Asked if he agrees with Walker's figures and his projections, Sen.
Conrad says, "I do. You know, I mean we could always question the
precise nature of this projection or that projection. But, that misses
the point. The larger story that he is telling is exactly correct."
Conrad acknowledges that most people in Washington are aware how bad
the situation is. "They know in large measure here, Republicans and
Democrats, that we are on a course that doesn't add up," the senator
tells Kroft.
"Why doesn't somebody do something about it?" Kroft asks.
"Because it's always easier not to. 'Cause it's always easier to
defer, to kick the can down the road to avoid making choices. You
know, you get in trouble in politics when you make choices," Sen.
Conrad says.
Asked if he thinks taxes should be raised, the senator says, "I
believe first of all, we need more revenue. We need to be tough on
spending. And we need to reform the entitlement programs ... we need to
do all of it."
But he admits he doesn't think there's a consensus for raising taxes.
"Any politician who tells you that we can solve our problem without
reforming Social Security, Medicare, and Medicaid is not telling you
the truth," Walker told an audience at the University of Denver.
Over the next year, the nation's top accountant will be traveling to
the early primary states, telling voters that we need to begin raising
taxes or government revenues and put a cap on federal spending if we
want to maintain our economic security and standard of living.
"If you tell them the truth, if you give them the facts, if you
explain this in terms of not just numbers but values and people, they
will get it and empower their elected officials to make tough
choices," Walker argues.
Asked if he knows any politicians willing to raise taxes or cut back
benefits, Walker says, "I don't know politicians that like to raise
taxes. I don't know politicians that like to cut spending, but I think
what we have to recognize is this is not just about numbers. We are
mortgaging the future of our children and grandchildren at record
rates, and that is not only an issue of fiscal irresponsibility, it's
an issue of immorality."
(CBS) When the stock market plunges like it did this week, everyone
pays attention. The man you're about to meet says hardly anyone is
paying attention to what really threatens our financial future. Like
an Old Testament prophet, David Walker has been traveling the country,
urging people to "wake up before it's too late."
But David Walker is no wild-eyed zealot. As Steve Kroft reports, David
Walker is an accountant, the nation's top accountant to be exact, the
comptroller general of the United States. He has totaled up our
government's income, liabilities, and future obligations and concluded
the numbers simply don't add up. And he's not alone. Its been called
the "dirty little secret everyone in Washington knows" - a set of
financial truths so inconvenient that most elected officials don't
even want to talk about them, which is exactly why David Walker does.
--------------------------------------------------------------------------------
"I would argue that the most serious threat to the United States is
not someone hiding in a cave in Afghanistan or Pakistan but our own
fiscal irresponsibility," Walker tells Kroft.
David Walker is a prudent man and a highly respected public official.
As comptroller general of the United States he runs he Government
Accountability Office, the GAO, which audits the government's books
and serves as the investigative arm of the U.S. Congress. He has more
than 3,000 employees, a budget of a half a billion dollars, and a
message he considers urgent.
"I'm going to show you some numbers...they're all big and they're all
bad," he says.
So bad, that Walker has given up on elected officials and taken his
message directly to taxpayers and opinion makers, hoping to shape the
debate in the next presidential election.
"You know the American people, I tell you, we've been to 13 cities
outside of Washington with the fiscal wake up tour. They are
absolutely starved for two things: the truth, and leadership," Walker
says.
He calls it a fiscal wake up tour, and he is telling civic groups,
university forums and newspaper editorial boards that the U.S. has
spent, promised, and borrowed itself into such a deep hole it will be
unable to climb out if it doesn't act now. As Walker sees it, the
survival of the republic is at stake.
"What's going on right now is we're spending more money than we make...
we're charging it to credit card...and expecting our grandchildren to
pay for it. And that's absolutely outrageous," he told the editorial
board of the Seattle Post Intelligencer.
You have heard this before, from Ross Perot 15 years ago. You might
have even thought the problem had been solved, when President Clinton
announced, "Tonight, I come before you to announce that the federal
deficit ... will be simply zero."
"Well, those days are gone. We've gone from surpluses to huge deficits
and our long range situation is much worse," Walker says.
"President Bush would argue that the economy is in pretty good shape,
unemployment is down, the deficit is actually less than expected,"
Kroft remarks.
"The fact is, is that we don't face an immediate crisis. And, so
people say, 'What's the problem?' The answer is, we suffer from a
fiscal cancer. It is growing within us. And if we do not treat it, it
could have catastrophic consequences for our country," Walker
replies.
The cancer, Walker says, are massive entitlement programs we can no
longer afford, exacerbated by a demographic glitch that began more
than 60 years ago-- a dramatic spike in the fertility rate called the
"baby boom."
Beginning next year, and for 20 years thereafter, 78 million Americans
will become pensioners and medical dependents of the U.S. taxpayer.
"The first baby boomer will reach 62 and be eligible for early
retirement of Social Security January 1, 2008. They'll be eligible for
Medicare just three years later. And when those boomers start retiring
in mass, then that will be a tsunami of spending that could swamp our
ship of state if we don't get serious," Walker explains.
To illustrate their impact, he uses a power point presentation to show
what would happen in 30 years if the U.S. maintains its current course
and fulfills all of the promises politicians have made to the public
on things like Social Security and Medicare.
What would happen in 2040 if nothing changes?
"If nothing changes, the federal government's not gonna be able to do
much more than pay interest on the mounting debt and some entitlement
benefits. It won't have money left for anything else - national
defense, homeland security, education, you name it," Walker warns.
Walker says you could eliminate all waste and fraud, and the entire
Pentagon budget and the long range financial projections barely
change, in what's shaping up as an actuarial nightmare.
Part of the problem, Walker acknowledges, is that there won't be
enough wage earners to support the benefits of the baby boomers. "But
the real problem, Steve, is health care costs. Our health care problem
is much more significant than Social Security," he says.
Asked what he means by that, Walker tells Kroft, "By that I mean that
the Medicare problem is five times greater than the Social Security
problem."
The problem with Medicare, Walker says, is people keep living longer,
and medical costs keep rising at twice the rate of inflation. But
instead of dealing with the problem, he says, the president and the
Congress made things much worse just three years ago when they
expanded the Medicare program to include prescription drug coverage.
"The prescription drug bill was probably the most fiscally
irresponsible piece of legislation since the 1960s," Walker argues.
Asked why, Walker says, "Well, because we promise way more than we can
afford to keep. Eight trillion dollars added to what was already a 15
to $20 trillion under-funding. We're not being realistic. We can't
afford the promises we've already made, much less to be able, piling
on top of 'em."
With one stroke of the pen, Walker says, the federal government
increased existing Medicare obligations nearly 40 percent over the
next 75 years.
"We'd have to have eight trillion dollars today, invested in treasury
rates, to deliver on that promise," Walker explains.
Asked how much we actually have, Walker says, "Zip."
So where's that money going to come from?
"Well it's gonna come from additional taxes, or it's gonna come from
restructuring these promises, or it's gonna come from cutting other
spending," Walker says.
He is not suggesting that the nation do away with Medicare or
prescription drug benefits. He does believe the current health care
system is way too expensive, and overrated.
"On cost we're number one in the world. We spend 50 percent more of
our economy on health care than any nation on earth," he says.
"We have the largest uninsured population of any major industrialized
nation. We have above average infant mortality, below average life
expectancy, and much higher than average medical error rates for an
industrialized nation," Walker points out.
Walker says we have promised almost unlimited health care to senior
citizens who never see the bills, and the government already is
borrowing money to pay them. He says the system is unsustainable.
"It's the number one fiscal challenge for the federal government, it's
the number one fiscal challenge for state governments and it's the
number one competitive challenge for American business. We're gonna
have to dramatically and fundamentally reform our health care system
in installments over the next 20 years," Walker tells Kroft.
And if we don't?
"And if we don't, it could bankrupt America," Walker argues.
You're probably expecting to hear from someone who disagrees with the
comptroller general's numbers, projections, and analysis. But hardly
anyone does. He is accompanied on the wake-up tour by economists from
the conservative Heritage Foundation, the left-leaning Brookings
Institution, and the non-partisan Concord Coalition. The only
dissenters seem to be a small minority of economists who believe
either that the U.S. can grow its way out of the problem, or that
Walker is over-stating it.
"The Wall Street Journal for example calls you 'Chicken Little,'
running around saying that the 'sky is falling, the sky is falling,'"
Kroft remarks.
"Unfortunately they don't get it. I don't know anybody who has done
their homework, has researched history, and who's good at math who
would tell you that we can grow our way out of this problem," Walker
replies.
Federal Reserve Chairman Ben Bernanke validated much of Walker's take
on the situation at congressional hearings this year, and so did
ranking Republicans and Democrats on the Senate Budget Committee.
Senator Kent Conrad of North Dakota is the Chairman.
Sen. Conrad thinks David Walker is "providing an enormous public
service."
Asked if he agrees with Walker's figures and his projections, Sen.
Conrad says, "I do. You know, I mean we could always question the
precise nature of this projection or that projection. But, that misses
the point. The larger story that he is telling is exactly correct."
Conrad acknowledges that most people in Washington are aware how bad
the situation is. "They know in large measure here, Republicans and
Democrats, that we are on a course that doesn't add up," the senator
tells Kroft.
"Why doesn't somebody do something about it?" Kroft asks.
"Because it's always easier not to. 'Cause it's always easier to
defer, to kick the can down the road to avoid making choices. You
know, you get in trouble in politics when you make choices," Sen.
Conrad says.
Asked if he thinks taxes should be raised, the senator says, "I
believe first of all, we need more revenue. We need to be tough on
spending. And we need to reform the entitlement programs ... we need to
do all of it."
But he admits he doesn't think there's a consensus for raising taxes.
"Any politician who tells you that we can solve our problem without
reforming Social Security, Medicare, and Medicaid is not telling you
the truth," Walker told an audience at the University of Denver.
Over the next year, the nation's top accountant will be traveling to
the early primary states, telling voters that we need to begin raising
taxes or government revenues and put a cap on federal spending if we
want to maintain our economic security and standard of living.
"If you tell them the truth, if you give them the facts, if you
explain this in terms of not just numbers but values and people, they
will get it and empower their elected officials to make tough
choices," Walker argues.
Asked if he knows any politicians willing to raise taxes or cut back
benefits, Walker says, "I don't know politicians that like to raise
taxes. I don't know politicians that like to cut spending, but I think
what we have to recognize is this is not just about numbers. We are
mortgaging the future of our children and grandchildren at record
rates, and that is not only an issue of fiscal irresponsibility, it's
an issue of immorality."