FORMER GAO CHIEF: TRUE NATIONAL DEBT $65T, GOV’T SPENDING HAS ‘LOST TOUCH WITH REALITY’

by JOHN HAYWARD7 Nov 2015187

In a radio interview airing on Sunday, former U.S. Comptroller General and chief of the Government Accountability Office Dave Walker asserted that America’s national debt is over three times the official figure, which dramatically understates the government’s financial commitments.

Walker told host John Catsimatidis of AM-970 in New York, as related by The Hill:

If you end up adding to that $18.5 trillion the unfunded civilian and military pensions and retiree healthcare, the additional underfunding for Social Security, the additional underfunding for Medicare, various commitments and contingencies that the federal government has, the real number is about $65 trillion rather than $18 trillion, and it’s growing automatically absent reforms.

Like other critics of our rapidly inflating national debt, Walker warned it would have serious ramifications for both America’s economic health and national security. He explained:

If you don’t keep your economy strong, and that means to be able to generate more jobs and opportunities, you’re not going to be strong internationally with regard to foreign policy, you’re not going to be able to invest what you need to invest in national defense and homeland security, and ultimately you’re not going to be able to provide the kind of social safety net that we need in this country.

Walker worried that Americans have “lost touch with reality” when it comes to government spending. The political class profits from that sense of unreality, banking on the public’s reluctance to dwell on red ink of incomprehensible debt. Numbers too big for voters to wrap their heads around seem unreal.

Walker is one of many analysts who have attempted to calculate the “true” national debt, which is indisputably much higher than the already horrifying $18 trillion figure cited as the final year of Barack Obama’s presidency approaches. Some figure total federal unfunded liabilities at almost $127 trillion, nearly double the figure Walker proposed. Some believe that number will soar past $210 trillion in a few decades.

These higher total debt figures are based on projections into the future – in essence, totaling up all the money the government is expected to spend over the coming years, then subtracting the amount of tax revenue it anticipates collecting. Such projections have been criticized for making too many static assumptions about government expenses and revenue, such as assuming that the national gross domestic product will not change substantially, or using very long timelines to calculate staggering amounts of far-future debt.

Walker, however, is avoiding all such arguments about whether valid projections can be made across the span of generations. His $65 trillion figure is a hard number based on current obligations, which relies upon no debatable assumptions about the future. The only real way to dispute his calculation is to assume GDP will grow much larger in the future, yielding a bounty of additional tax revenue… and that’s exactly what he recommends achieving, when he talks about keeping the economy strong and creating jobs. Of course, it will also be necessary to keep the political class from spending that additional revenue, instead of using it to pay down the national debt.

The former Comptroller General delivered a similar warning two weeks ago at a financial conference in Iowa, saying that federal spending has grown to 21 percent of GDP, and 68 percent of that budget expands on “autopilot.”

“The federal government has grown too big, promised too much, lost control of the budget and needs to restructure,” he declared, warning that tinkering around the margins with simple tax increases or minor spending cuts would not be enough to “defuse this ticking debt bomb.”

The great danger is that our debt burden is growing so large that it interferes with the very productivity necessary to pay it off. This menace will become especially obvious when debt service eats up so much of Big Government’s discretionary spending that economy-crushing tax increases are needed to keep anything beyond mandatory entitlement spending flowing.

Walker asked politicians to come together on a bipartisan basis and resolve the debt crisis, because their “duty of loyalty needs to be to country rather than to party,” but sadly it’s easier to talk about a bipartisan consensus for unrestrained spending.

We have a political class that lets “budgeting” slide until the last possible moment, counting on a Beltway panic over a prospective “government shutdown” or “default” short-circuit fiscal prudence, leading to the hasty passage of massive spending bills scarcely anyone bothers to read in full. Conservative politicians seriously inclined towards spending restraint are few, and easily trampled by the panicked debt-ceiling stampede. The closest thing to a universal political consensus in Washington is that the big spenders win all shutdown showdowns, no contest. Until that changes, what hope do we really have of avoiding the worst national-debt meltdown scenarios?