Rebate? Maybe You Owe the Government $150,000
Government Official Suggests Congress Ask Citizens for Share of National Debt
By Z. BYRON WOLF
Jan. 29, 2008—
One government agent believes Congress should slip a little extra something when and if they mail out those much-debated rebate checks: a $150,000 bill, payment due immediately.
"Perhaps when you send out the check, if you also sent out the $150,000 bill (debt per person) … that would get the message across," U.S. Comptroller General David Walker suggested half jokingly to lawmakers Monday. "We are a great country. We are great at spending. But, unfortunately, we are poor at saving."
National Debt, Individual Responsibility
Walker's point is simple: The national debt is out of control, and it's time to do something about it.
His unorthodox suggestion of charging $150,000 per American accounts for not only $9.2 trillion real national debt held by the U.S. government right now but also factors in the $53 trillion the government has pledged to citizens in Social Security and Medicare payments.
Funds for those programs are supposed to be accounted for in a trust fund set aside for Social Security. Instead, the government has essentially written IOUs for borrowed money.
"If they did this in the private sector," Walker told Congress, "they'd go to jail. You can't invest in your own debt."
Economic Woes
President Bush, in his final State of the Union address, told Congress the nation is strong but, according to Walker, the long-term state of the economy, is bleak and getting worse every day.
Walker heads the nonpartisan Government Accountability Office and appeared Tuesday before lawmakers bleary-eyed from attending the president's address the previous night.
As part of the GAO's annual long-term economic outlook, this year titled "Action Is Needed to Avoid the Possibility of a Serious Economic Disruption in the Future," he had charts and graphs that show what everyone should already know -- government spending on entitlements, particularly on health care, will eat up more and more of government revenues as the baby boom generation ages.
You can view Walker's full presentation by clicking here.
Health care, said Walker, is the biggest offender.
"We spend a lot of money, but we get below average results for an industrialized nation," he said.
The cost of health care has been rising much faster than inflation for years, but often the government and employers provided health care insurance and bore the brunt of those rising costs.
"Individuals, really for the first time, are starting to feel the effect of increased health care costs, and they don't like it," he said.
Raise Taxes as Baby Boomers Retire?
Walker admitted that the economy has sustained growth for a long period of time but said that as baby boomers retire and start drawing Social Security and Medicare checks, the surplus would draw down, perhaps flatlining as early as 2015.
He said he worries that Congress will suddenly have an epiphany that something should be done about it in 2017.
"When you look ahead, based on a realistic assessments, we've never seen anything like this," he said, arguing that no amount of economic growth will change the budget situation.
"We cannot grow our way out of the problem," he said. "It's going to take tax reform, budget review, and it's going to have to take more revenue. The default is higher taxes."
Without some change in the long-term budget outlook, Walker said foreign governments will be less and less likely to buy debt from the United States. Interest rates will rise, and it will all have a "compounding effect" on American families, businesses and governments.
Senators from both parties agreed the government needs to address the issue.
Budget Committee Chairman Sen. Kent Conrad, D-N.D., said, "We have kicked this can down the street for long enough."
Sen. Judd Gregg, R-N.H., the ranking Republican on the committee, said tough choices had to be made.
But where they start to disagree is where and how.