David Walker, the U.S. Comptroller General, is on a fiscal wakeup tour of the U.S. warning us of our pending fiscal disaster. Walker has added up all the federal government’s income and compared it to all our liabilities and future obligations ($53 trillion) and has concluded that the current level of spending is unsustainable. ($53 trillion is about the total wealth of all the American households)
While Walker is on his wakeup tour, our Congress Critters continue spending us into bankruptcy. Yes, these are the very same Congress Critters that passed a 3,416-page omnibus spending bill that no one read before passing. The omnibus spending bill bundled 13 individual spending bills into one giant half-trillion-dollar spending bill. So instead of debating and voting on the merits of each item of an agency’s appropriation bill separately, our Congress Critters dumped everything into a single spending bill. Despite the Democrats promises of change, this omnibus spending bill has over 11,000 earmarks. Speaker of the House Nancy Pelosi (D-Ca) said this “…begins to set us in a New Direction.” Hmmmm!
Earmarks are not audited and have little to no government oversight or accountability, which promotes irresponsible spending. While earmarks are not signally responsible for the $53 trillion of government obligations, earmarks are an indicator of our Congress Critters lack of fiscal responsibility.
Walker warns us that our Congress Critters have created such a fiscal crisis that if action isn’t taken soon we will be unable to recover. Walker said, “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.” While our Congress Critters ignore Walker’s warning – none dispute it.
So, what happens if we can only pay interest on the debt and the creditors that financed the massive spending want their money back? If you borrow from a bank and can’t pay, the bank will force you to liquidate your assets to pay the debt. The same could occur if the U.S. defaults on its loans.
The liquidation of U.S. assets could start with the Interstate Highway System. Imagine that a Saudi based OPEC consortium assumed control of all our north - south Interstate Highways. The familiar Interstate Highway road sign might indicate ‘OPEC 5’ as we drive north. Also assume that a European based consortium assumed control of our east - west interstate highways. Then we may see a ‘EURO 10’ sign as we drive east. Of course the new owners of the Interstate Highway system will want a return on their investment so expect all the OPEC/Euro interstate highways to be toll roads.
If losing control of the Interstate Highway system doesn’t pay off the debt, we may need to sell airports. Assume an Asian based consortium assumed control of all our airports and air control system. This embarrassing scenario could continue until all our creditors are paid. We can only hope that we don’t have to surrender our National Parks to Venezuela. Imagine driving up to Yellowstone, the Grand Canyon, or Yosemite and be greeted by a Venezuelan flag and a huge billboard with a picture of a smiling Hugo Chavez.
This nightmare scenario doesn’t have to occur. But to prevent it our Congress Critters have to recognize the existing financial problem and take action. We have a strong economy so we could grow out of this financial crisis, but our Congress Critters need to cut spending.
Walker reminds us that we can eliminate all the waste and fraud and the entire Pentagon budget and the problem would still exist. The entitlement programs are bankrupting the country and Congress Critters are afraid to cut them. Our Congress Critters need to reevaluate, means test, and reduce the size of all ‘entitlement’ programs, starting with the Medicare, (particularly the 2003 Medicare drug bill) Medicaid, and Social Security.
It is unfair to burden future generations with unfunded obligations. Only the greediest would pass this debt to their children and grandchildren.
