Watching the debt pile up
One has to credit former President Bill Clinton with the right approach, forced on him by the ’94 Republican revolution, which brought the GOP control of the Congress and fourteen additional statehouses, if memory serves, including North Carolina for the first time since Reconstruction.
“Arithmetic,” said Mr. Clinton. And by arithmetic — a poorly understood and therefore not widely used in government tool — our ten million dollar per minute spending habit will soon outstrip our ability to do most of the things that President Obama is so “hopeful” about, according to his acceptance speech last night. Borrow more money for student loans and health care. Yay!
Today in Manchester, N.H., former U.S. Comptroller General David Walker launches a bus tour which will criss-cross the nation for the next two months, showing the American people the mathematical structure of a $70 trillion debt tsunami that could dislodge us from our perch among the most successful nations for a long time.
Even though he has never won the Nobel Peace Prize, Mr. Walker is a highly respected accountant in the private sector, having been a partner and global managing director of Arthur Andersen LLP, and before that, running a human resources practice at Coopers & Lybrand. He developed his expertise on the federal budget from a decade of service through 2008 as comptroller general under presidents of both major political parties and has headed the Government Accountability Office. He was also a public trustee for Social Security and Medicare from 1990 to 1995 and was assistant secretary of labor for pension and welfare benefit programs during the Reagan administration.
The “Comeback America Initiative,” which Walker leads, is backed by a wide variety of experts who are concerned that the nearly thousand million dollars a day that Washington currently pays to service just the interest on our national debt is a war on children that has no precedent. Mr. Walker has been warning for at least a year that there is a very small window lasting no more than the next couple of years to address this problem and to begin to recover our financial footing before the solution becomes catastrophic.
I well remember the Grace Commission — an earlier and much more comprehensive version of the Simpson-Bowles effort — commissioned by President Reagan and presented to Congress in 1984. This investigation took three years and involved loaned executives from hundreds of private sector businesses formed into groups to look at specific areas of government responsibility. It concluded that if its recommendations were followed, which of course they mostly weren’t, about $424 billion dollars could be saved in three years.
Officially named the President’s Private Sector Survey on Cost Control, this report made the following astonishing claim:
“With two-thirds of everyone’s personal income taxes wasted or not collected, 100 percent of what is collected is absorbed solely by interest on the federal debt and by federal government contributions to transfer payments. In other words, all individual income tax revenues are gone before one nickel is spent on the services taxpayers expect from their government.”
What I remember most clearly is that the price tag for fixing the government-regulation-induced savings and loan problem, which soon became a scandal and then a full-blown crisis, was estimated to be a little over $20 billion. Deferred, implementing the fix cost American taxpayers more than $124 billion in federal taxes by the end of 1999, and this does not account for state-run thrift insurance funds, bailouts or insurance funds spent before 1986 or after 1996. The GAO has estimated a total cost to us of $160 billion, but who knows.
Multiply that, if you know how to multiply, by the numbers we are looking at these days, and try to believe that the rapidly expanding debt and entitlement reform shouldn’t be the co-defining issues of this presidential election – with “likeability” of the chief executive, of course.
The “Comeback America Initiative” will sponsor major town hall events in the battleground states of Ohio and Virginia on Sept. 15 and Oct. 6, respectively. These meetings will be co-presented by Dr. Isabel Sawhill, senior fellow of the Brookings Institute – not exactly a haven for conservatives, as many of you know.
Check out the website at http://keepingamericagreat.org/ to learn more.
