Is America Going Broke?

The United States is the world’s best customer. It buys far more from foreign countries than it sells to them, resulting in a sizable trade deficit. It also spends more on public programs than it collects in tax revenues. And to pay for all these outlays, the U.S. must attract mountains of foreign capital each year, which essentially amounts to borrowing from foreign governments and investors. Those foreign countries don’t lend out of the goodness of their hearts; for the most part they lend because the U.S. uses that money to buy goods from them and other nations. But foreign investors cannot go on forever supporting U.S. spending. The issue is even more pressing given the fact that the U.S. dollar has been falling for more than a year, decimating returns for those foreigners who invest in U.S. bonds.

David Walker can see the future, and it scares the hell out of him.

That wouldn’t be terribly unusual if he were one of the thousands of lobbyists, legislators and activists crawling all over Washington on any given day, pontificating about the urgency of their pet issues. There is a thriving industry here built on pushing policy prescriptions for every ailment, real or imagined. But Walker isn’t a lobbyist or an activist, he’s an accountant. His title is comptroller general of the United States, which makes him the head auditor for the most important and powerful government in the world. And he’s desperately trying to get a message out to anyone who’ll listen: the United States of America’s public finances are a shambles. They’re getting rapidly worse. And if something major isn’t done soon to solve the country’s intractable budget problems, the world will face an economic shakeup unlike anything ever seen before.

Seated in his wood-panelled office in downtown Washington, Walker measures his words, trying to walk the fine line between raising an alarm and fostering panic. He cringes when he hears prominent economists warning about a financial “Armageddon,” but he makes no bones about the fact the situation is dire.

Posted by Gregoire
I was born in NYC, raised in Palo Alto CA, attended university at UC Santa Cruz. I spent the better part of a decade traveling in Asia and working in restaurants before entering graduate school in Tibetan and Buddhist Studies at UVA in Charlottesville VA,...