MY VIEW: David Walker October 2012

Former U.S. Comptroller General and CRFB Board Member David Walker has been busy traveling across the country on Comeback America's fiscal responsiblity bus tour. But instead of displaying a national debt clock, he prefers an alternative number, a measure of unfunded liabilities he calls the "Burden Baromenter."

The Comeback America Initiative created the Burden Barometer to engage voters on the full dimensions of our fiscal challenge and encourage them to pressure candidates for national office to get serious about solutions — or pay the price on Election Day. While the Debt Clock shows our country’s current gross federal debt, the Burden Barometer reflects the federal government’s total liabilities, unfunded promises and other commitments and contingencies.

The $70 trillion figure incorporates liabilities such as publicly held debt; unfunded military and civilian pensions and retiree health obligations; unfunded social insurance promises, most prominently, Medicare and Social Security; and a range of other federal commitments and contingencies, including the Federal National Mortgage Association and the Pension Benefit Guaranty Corporation. To arrive at an official and credible tally, we used the figures in official financial statements of the U.S. government and other official government reports, among them the annual Social Security and Medicare Trustees Reports and the Congressional Budget Office’s current projected deficit for fiscal 2012.

Clearly there’s creative accounting in many politicians’ assessments of the nation’s fiscal condition — and plenty of demagoguery, too, from partisan and ideological players who want you to think we don’t have a problem or that there are easy answers. Economic growth alone can’t fix our woes and more tax cuts will not pay for themselves. We need to start making tough choices.

If a politician says there’s no need to reform our social insurance programs, don’t believe it. We have to combine Medicare, Medicaid and Social Security reforms, along with other reductions in defense and other federal spending, with revenue increases or the math just won’t add up. In addition, we must rationalize our healthcare promises and focus on controlling costs.

The good news is that serious action, taken soon, can slow the Burden Barometer’s rise, and even significantly reduce the number being displayed. That’s because, unlike the Debt Clock — which won’t drop by a dollar due to fiscal reforms — the Burden Barometer includes present and future spending as determined by our government’s promises and policies. If our elected officials enact meaningful reforms, even if they are phased in over time, the Burden Barometer’s number could instantly go down by tens of trillions of dollars.

The number might help some people understand the present value of our long-term fiscal imbalances. Looking at long-term debt to GDP projections is another way. Regardless of what number you use, it is pretty clear that our fiscal outlook is not in balance. Politicians need to make the changes now while they can be phased in slowly, since waiting will only allow our fiscal gap to grow larger.

The full piece can be found here.

"My Views" are works published by members of the Committee for a Responsible Federal Budget, but they do not necessarily reflect the views of all members of the committee.