Wednesday, March 12, 2008

I had the privilege to listen to listen to a presentation by David M. Walker, Comptroller General of the United States on his last day in office. He took the opportunity to go over a presentation that he has given in various forums over the past few months to explain how his generation, the baby boomers, have not been good stewards of our economy. He is concerned that, if things don't change, we will not be able to sustain our economy or our current standard of living. If his predictions are correct, the baby boomers will be the first generation in American History to leave the economy in worse condition than they found it.

The graph below is is one of the first in his discussion of trends in federal spending.

As you go through the brief, keep in mind
  • We are paying compounded interest on our growing debt
  • We are a rich nation today because nations around the world believe that we are a good economic risk, and spend lots of money in the U.S.
  • The U.S. economy would be in grave danger if the markets were to flee the U.S. dollar because we were no longer a safe investment
One last slide from his brief to help make the point.

In this slide Walker makes the point that the U.S. spending is already exceeding revenue, and if no action is taken by 2040, we will not have enough revenue to cover some of our mandatory obligations (like Medicare & Medicade) and discretionary spending such as National Defense and Diplomacy . Sad to say, if our economy gets to the 2040 scenario, the average American will have more to worry about than medical coverage and national defense.

Mr Walker presented a compelling argument for fiscal reform and restraint, I encourage everyone to check out his briefings posted on the GAO site and watch as he transitions into the private sector.

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