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U.S. Standard of Living Unsustainable Without Drastic Action, Former Top Govt. Accountant Says

Posted Mar 31, 2010 10:18am EDT by Heesun Wee in Investing, Recession
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Who will bail out America? A longtime budget hawk and currently CEO of the Peter G. Peterson Foundation, David Walker says America's growing long-term debt is dangerously close to passing a "tipping point" that could trigger soaring interest rates and a plummeting dollar. In a worst case scenario, that could trigger a "global depression," he says, warning: "Nobody's going to bail out America."

With the U.S. facing $50 trillion in unfunded liabilities and around $62 trillion in total long-term debt, what worries Walker most is what happens after the recession dissipates, as detailed here. "I'm less concerned with the short-term deficits than I am the fact that we're not doing anything about those structural deficits that people used to call long-term," says Walker, former U.S. Comptroller General and head of the Government Accountability Office. "But the long-term is here."

What's ultimately at stake may be nothing short of Americans' faith in government and our standard of living. "There is a way forward. There is hope," Walker says. "But we need to actually make some tough choices."

Walker, author of a new book, "Comeback America," argues the U.S. needs to tackle four key issues if the nation wants to recover:

  • Impose tough budget limits
  • Reform Social Security
  • Cut health-care costs
  • Reform the U.S. tax system 
Click on the player to get Walker's take on the Tea Party movement, and to embed and share the video.
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