Does the govenment's head accountant see a finacial crisis looming?
*AP, by Martin Cutsinger, October 28, 2006:
U.S. Government Accounting Office Chief Warns Economic Disaster Looms
"David M. Walker sure talks like he's running for office. "This is
about the future of our country, our kids and grandkids," the
comptroller general of the United States warns a packed hall at
Austin's historic Driskill Hotel. "We the people have to rise up to
make sure things get changed."
But Walker doesn't want, or need, your vote this November. He already
has a job as head of the Government Accountability Office, an
investigative arm of Congress that audits and evaluates the performance
of the federal government.
Basically, that makes Walker the nation's accountant-in-chief. And the
accountant-in-chief's professional opinion is that the American public
needs to tell Washington it's time to steer the nation off the path to
financial ruin.
From the hustings and the airwaves this campaign season, America's
political class can be heard debating Capitol Hill sex scandals, the
wisdom of the war in Iraq and which party is tougher on terror.
Democrats and Republicans talk of cutting taxes to make life easier for
the American people.
What they don't talk about is a dirty little secret everyone in
Washington knows, or at least should. The vast majority of economists
and budget analysts agree: The ship of state is on a disastrous course,
and will founder on the reefs of economic disaster if nothing is done
to correct it.
There's a good reason politicians don't like to talk about the nation's
long-term fiscal prospects. The subject is short on political theatrics
and long on complicated economics, scary graphs and very big numbers.
It reveals serious problems and offers no easy solutions. Anybody who
wanted to deal with it seriously would have to talk about raising taxes
and cutting benefits, nasty nostrums that might doom any candidate who
prescribed them."
"Why is America so fiscally unprepared for the next century? Like many
of its citizens, the United States has spent the last few years racking
up debt instead of saving for the future. Foreign lenders -- primarily
the central banks of China, Japan and other big U.S. trading partners
-- have been eager to lend the government money at low interest rates,
making the current $8.5-trillion deficit about as painful as a big
balance on a zero-percent credit card.
In her part of the fiscal wake-up tour presentation, Rogers tries to
explain why that's a bad thing. For one thing, even when rates are low
a bigger deficit means a greater portion of each tax dollar goes to
interest payments rather than useful programs. And because foreigners
now hold so much of the federal government's debt, those interest
payments increasingly go overseas rather than to U.S. investors.
More serious is the possibility that foreign lenders might lose their
enthusiasm for lending money to the United States."
*This information is solely a highlight of the opinion of a third-party publication and is incomplete. Please subscribe to this publication for the full and timely opinion of the author and call a Monex Account Representative for any additional up-to-date information. This is not an offer to buy or sell precious metals. Investors should obtain advice based on their own individual circumstances and understand the risk before making any investment decision.
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