GAO: Nation On The Road To Financial Ruin

GAO report shows nation faces major fiscal crisis.

The Government Accountability Office recently released a report from a forum of experts that sought to address ways to improve public understanding of the nation’s growing fiscal imbalance. The report is available here.

The forum, convened by Comptroller General David M. Walker on Dec. 2, 2004, included 63 representatives of think tanks, government agencies, key private sector players, the media, and public opinion experts. Under the ground rules of the forum, individual speakers are not identified in the report unless they made a formal presentation before the group, but the report reflects the discussion during the day-long gathering.

“Simply put, our nation’s fiscal policy is on an unsustainable course. As long-term budget simulations by GAO, the Congressional Budget Office, and others show, over the long term we face a large and growing structural deficit due primarily to know demographic trends, rising health care costs, and relatively low levels of federal revenues as a percent of GDP. Continuing on our present path will gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our national security. It will also increasingly constrain our ability to address emerging and unexpected budgetary needs.

“Regardless of the assumptions used, all reasonable simulations indicate that the problem is too big to be solved by economic growth alone or by making modest changes to existing spending and tax policies. Nothing less than a fundamental reexamination of all major federal spending and tax policies and priorities is needed. This reexamination should also involve a national discussion about what Americans want from their government and how much they are willing to pay for those things. This discussion will not be easy, but it must take place because time is working against us.

“As with any major public policy challenge, effective and sustained leadership will be critical. But leadership cannot succeed without public understanding and support.”

Walker also will address the impact of the government’s fiscal imbalance on Wednesday, Feb. 2, at a conference for state and local government officials at the National Press Club. Walker is the keynote speaker at lunch; the conference is sponsored by Governing magazine and the NCSL Foundation.

About the Author

Ralph Smith has several decades of experience working with federal human resources issues. He has written extensively on a full range of human resources topics in books and newsletters and is a co-founder of two companies and several newsletters on federal human resources. Follow Ralph on Twitter: @RalphSmith47