Sunday, 6 September 2009

"America now owes more than Americans are worth—and the gap is growing"

The following notable quotes come from an interview in the WSJ with David Walker who as the article mentions "was appointed by President Bill Clinton (in 1989) to head the GAO, where he spent the next decade issuing reports trying to stem waste, fraud and abuse in government."

"Our off balance sheet obligations associated with Social Security and Medicare put us in a $56 trillion financial hole—and that's before the recession was officially declared last year. America now owes more than Americans are worth—and the gap is growing!"

"We have four deficits: a budget deficit, a savings deficit, a value-of-the-dollar deficit and a leadership deficit...We are treating the symptoms of those deficits, but not the disease."

"Our $56 trillion in unfunded obligations amount to $483,000 per household. That's 10 times the median household income—so it's as if everyone had a second or third mortgage on a house equal to 10 times their income but no house they can lay claim to."

As for this year's likely deficit of $1.8 trillion, Mr. Walker suggests its size be conveyed thusly: "A deficit that large is $3.4 million a minute, $200 million an hour, $5 billion a day," he says. That does indeed put things into perspective.
Fortunately Mr Walker sees some light at the end of the tunnel.

"What happened to the Founders' intent that all roles not expressly reserved to the federal government belong to the states, and ultimately the people?" he asks. "I'm pleased the recent town halls show people are waking up and realizing it's time to pay attention to first principles."

Let's just hope that the light at the end of the tunnel is not the proverbial locomotive hurtling towards us all at breakneck speed.

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