Comptroller General of the United States Dawid M. Walker's speech on September 17, 2003.
http://www.gao.gov/cghome/npc917.pdfRare leak of truth out of Washington. Just seven pages. If you are too lazy, start reading pages 2 and 3.
...an approximate $7 trillion accumulated deficit, or a little over $24,000 for every man, woman and child in the United States.
... the Congressional Budget Office (CBO) estimates that the unified budget deficits in fiscal years 2003 and 2004 will be $401 billion and $480 billion, respectively. Furthermore, CBO estimates that, excluding Social Security surpluses, the total deficit for fiscal years 2003 and 2004 will be $562 billion and $644 billion, respectively.
Importantly, while we are starting off in a financial hole we don’t really have a very good picture of how deep it is. Specifically, there are a number of very significant items that are not currently included as liabilities in the federal government’s financial statements; for example, several trillion dollars ... in so-called “Trust Funds.” In the case of the Social Security and Medicare Trust Funds, the federal government took in taxpayer money, spent it on other items and replaced it with an IOU. Given this fact, why aren’t the amounts attributed to such activities shown as a “liability” of the U.S. Government? ... The current U.S government liability figures also do not adequately consider veterans’ health care benefit costs provided through the Department of Veteran’s Affairs nor do they include the difference between future promised and funded benefits in connection with the Social Security and Medicare programs. These additional amounts total tens of trillions of dollars in discounted present value terms. Stated differently, they are likely to exceed $100,000 in additional burden for every man, woman and child in America today
And speak of "Enron accounting"
The recent accountability failures in the private sector serve to re-enforce the importance of proper accounting and reporting practices. It is critically important that such failures not be allowed to occur in the public sector. We at GAO are dedicated to assuring that they don’t and to helping to assure that additional progress is made on these and other important transparency and accountability issues. In this regard, earlier this year GAO was unable to express an opinion as to whether the U.S. Government’s consolidated financial statements were fairly stated for a sixth consecutive year. Our inability to express an opinion was based primarily on serious financial management problems at the Defense Department, the government’s inability to adequately account for certain intra-governmental transactions, and the government’s inability to properly prepare consolidated financial statements.
And how about the future?
what about our future fiscal outlook? After all, if it is positive then we don’t need to be as concerned. Unfortunately, it is not positive under a “status quo” or “business as usual” scenario. It’s true that deficits are understandable and sometimes necessary in times of recession and/or war. However, while it may not seem like it to those who are out of work or underemployed, we have not been in a recession for almost two years. In addition, the current and projected deficits far exceed the costs associated with Iraq, the global war against terrorism and any incremental homeland security costs. The “bottom line” is, there is little question that deficits do matter, especially if they are large, structural and recurring in nature.
Specifically, GAO’s long-range budget simulations show that this nation faces a large and growing structural deficit due primarily to known demographic trends and rising health care costs. In less than 10 years, due primarily to the retirement of the baby boom generation, the United States will be hit by a huge demographic tidal wave that is not expected to ever recede!
As a result, the “status quo” scenario and “stay the course” approaches in connection with the deficit and fiscal matters are simply not viable options. Tough choices will have to be made by elected officials in order to address the nation’s large and growing fiscal gap. The ultimate alternatives to definitive and timely action are not only unattractive, they are arguably infeasible. Specifically, raising taxes to levels far in excess of what the American people have ever supported before, cutting total federal spending by unthinkable amounts, or further mortgaging the future of our children and grandchildren to an extent that our economy, our competitive posture and the quality of life for Americans would be seriously threatened.
Now, do not get me wrong. I am far from being a mr. Walker's admirer. His favorite 20th Century President is Theodore Roosevelt - who was instrumental in inflicting all that socialist mess on the country. And he wants to "take steps to assure that these programs are both solvent and sustainable over time" instead of dismantling them altogether.
But at least this socialist acknowleges that there is a problem and the current system does not work and the problems are "structural", "recurring" and "unmanageable", even if he cannot offer a real solution.
Most likely mr. Walker will be fired just like the Bush administration economic adviser Lawrence Lindsey who dared to suggest earlier this year that the occupation of Iraq will cost upwards of $100 billion. It now seems his estimate was on the conservative side.
We know what kind of solution will be chosen by the government no matter which of the two parties is in power. Taxpayers will get Social Security payments twenty years from now even if the government gives them pieces of paper with a portrait of Winnie the Pooh or Clinton (whichever one) on them.
miko
