Former Comp-Gen says US debt worse than PIIGS.

[boneyard bill]

David Walker, the former Comptroller-General of the US under Clinton and Bush has pointed out that the US debt to GDP ratio is worse than all of the PIIGS countries except for Greece. Furthermore, those debt figures do not include the unfunded liabilities for programs like social security, medicare, and Medicaid.

Walker strongly supports spending reform and tax reform and has gone on a campaign of his own to get Washington to listen. However, there is little evidence that he has had much success. Here is his video laying out the problem and giving facts and figures.

http://www.youtube.com/watch?v=FLgrKqIi4i0

 

[Underseer]

Social security and medicare are on a completely different budget, and even if no one does anything, they will remain solvent for another 50 years. The fact that this guy suggests that they are part of the "debt problem" suggests that he either doesn't know what he's talking about, or is deliberately making misleading statements for ideological reasons.

 

[laughing dog]

Yes, I will certainly take the views of an accountant on macroeconomics and finance very seriously.

 

[Bomb#20]

David Walker, the former Comptroller-General of the US under Clinton and Bush has pointed out that the US debt to GDP ratio is worse than all of the PIIGS countries except for Greece.

Not an apples-to-apples comparison. We have our own currency. If Greece hadn't tied itself to the Euro it could have managed its debt the old-fashioned way.

 

[Nice Squirrel]

gone on a campaign of his own to get Washington to listen. However, there is little evidence that he has had much success. Here is his video laying out the problem and giving facts and figures.

Yawn... needs more billions to get heard.

 

[Jason Harvestdancer]

Social security and medicare are on a completely different budget, and even if no one does anything, they will remain solvent for another 50 years. The fact that this guy suggests that they are part of the "debt problem" suggests that he either doesn't know what he's talking about, or is deliberately making misleading statements for ideological reasons.

My savings account and my checking account are completely different accounts, yet when I transfer money from savings to checking and then spend that money by writing a check, that money is no longer in either account. Yes, they are different accounts and different budgets, but the surplus from one is spent in the other. No, Social Security is not solvent for another 50 years because it was spent in the other account.

What Social Security has is a stack of IOUs from the other budget. That is like me writing myself an IOU whenever I transfer from savings to checking and then call that IOU an asset. Social Security will be insolvent the moment it really needs to cash in those IOUs. If I try to bring my IOUs to the bank to deposit into savings, they'd think that I'm crazy, or trying to defraud them. Which do you say the government is doing?

 

[boneyard bill]

Social security and medicare are on a completely different budget, and even if no one does anything, they will remain solvent for another 50 years. The fact that this guy suggests that they are part of the "debt problem" suggests that he either doesn't know what he's talking about, or is deliberately making misleading statements for ideological reasons.

This guy was the Comptroller-General of the United States, you're going to claim that he doesn't know what he's talking about? I'm afraid you're the one who fits that description. Social security has been part of the federal budget ever since Lyndon Johnson created the "unified budget" back in 1964, and medicare has been a part of that budget since its inception a short time later.

The medicare trust fund is pretty nearly empty right now. The social security trust fund in good at least until sometime in the 2030's, but the trust fund is irrelevant. It is simply IOU's from the Treasury Department so whatever social security withdraws from the trust fund has to be borrowed by the Treasury Department. Social security taxes do not cover current revenue so the SS Administration has to cash in their interest from the fund and that interest also has to be borrowed by the Treasury Department, but very soon the SS Administration will have to draw down principle from the fund to meet its current obligations.

 

[boneyard bill]

David Walker, the former Comptroller-General of the US under Clinton and Bush has pointed out that the US debt to GDP ratio is worse than all of the PIIGS countries except for Greece.

Not an apples-to-apples comparison. We have our own currency. If Greece hadn't tied itself to the Euro it could have managed its debt the old-fashioned way.

No. If they weren't part of the Eurozone they would still have to pay their debts. What they could have done is devalue their currency and create massive inflation which the politicians could have blamed on someone else. As it is they have take responsibility for the reckless spending and institute austerity measures which will be bad but probably not as bad as a devaluation would have been.