Fresh Air - David Walker

One of my favorite things is NPR's Fresh Air with Terry Gross. I'm not sure what it is about her, but she continually has some of the best interviews and I'm always totally engaged in whatever her show is airing, regardless of the guest. She just has a way of making everything seem very compelling and interesting. Last night I tuned in at the end of her interview with David Walker, the CEO of a foundation with the goal of finding bipartisan solutions for how to decrease our debt. What he said really resonated with me, so I've included the transcript below of the section that caught my attention. To listen to the full podcast or read the full transcript, click here.

GROSS: Do you sometimes feel like we're becoming a third world country? We have this huge debt. We're dependent on other countries to buy our debt. Our infrastructure is really old and outdated, especially like, if you compare some of our infrastructure and some of our transportation system to China's. Do you feel like we're really falling behind? And I dont even mean, you know, just financially, but just looking at our infrastructure, looking at our education system, looking at our public transportation system.

Mr. WALKER: We are a great country, but we're not as great as we think we are. We have a number of people, especially elected officials, who have a false sense of security, who think that because we're currently the only sole super power on Earth, which by the way, is temporary, that we must be top three in about everything. That's not the case. We're below average with regard to public finance. We're below average with regard to education results. We're below average with regard to health care outcomes. We're below with regard to the status of our critical infrastructure. We're below average with regard to investments in basic research. All of these are critical elements that help to determine whether or not youre going to have a better future.

We need to stop looking in the rearview mirror. We need to look ahead, and we need to look at those leading indicators and start taking steps that will help make sure that we can make tough choices and help insure that our future will be better than our past.

GROSS: That's going to require spending, isn't it - on things like public transportation, education?

Mr. WALKER: Yeah. One of the things that we need to do is first, we have to take steps to avoid passing a tipping point. Which tipping point would be a loss of confidence on behalf of foreign lenders in our ability to put our federal financial house in order. Government has grown since 1789, much bigger than the founders intended, and in many cases, it just doesnt generate positive results, both on the spending side and on the tax preference side.

We lose a trillion dollars a year in revenues due to tax preferences, deductions, exemptions, exclusions, credits. It's not in the budget. It's not in the financial statements, and many of them frankly, just dont work. And so, yes, in some cases we're going to need to spend more money in order to be able to create a better future but we just can't layer it on top of what we're already doing, because what we're already doing is unaffordable and unsustainable over time. So we have to start making tough choices to reprioritize, to eliminate, to target, and to be able to give us the ability to do more in areas where it makes sense to do more.

GROSS: Let me quote you something by the economist James K. Galbraith, and this was in a column that was called "In Defense of Deficits." And he wrote: To focus obsessively on cutting future deficits is a path that will obstruct, not assist, what we need to do to re-establish strong growth and high employment.

Private borrowers can and do default. They go bankrupt. With government, the risk of non-payment does not exist. Government spends money simply by typing numbers into a computer. Unlike private debtors, government does not need to have cash on hand. Public debt isn't a burden on future generations. It does not have to be repaid, and in practice, it will never be repaid.

What do you think?

Mr. WALKER: I think he's out of touch with reality. You can't spend more money than you make, indefinitely, without having severe adverse consequences. Under our present path, within 12 years, without an increase in interest rates, the single largest line item in the federal budget is interest on the federal debt. If there is a two percent increase in prevailing interest costs, which many people believe is optimistic, its going to be worse than that. The only thing the federal government will be able to do in 2035 - which is only 25 years from now - based on historical tax levels, is to pay interest on the federal debt.

Let's recognize reality. They're three key points with regard to spending. Spending more money than you make on a recurring basis is irresponsible. Irresponsibly spending somebody else's money is unethical - and if youre a fiduciary, a fiduciary breech. And irresponsibly spending somebody else's money when they're too young to vote and not born yet is immoral. And all three of those things are going on right now and they threaten America's future.

The decisions that we make or that we fail to make within the next five years, will largely determine whether our future is better than our past. And in my view, I want it to be better - for the sake of my kids and my grandkids.

GROSS: Just one more thing, it seems to me everybody has words of criticism for Congress. But is it time to start criticizing Americans too, individuals. And here's...

Mr. WALKER: Great question.

GROSS: ...here's what I mean, it seems to me like Americans, they want health care, they want roads that work.

Mr. WALKER: Mm-hmm. Mm-hmm.

GROSS: They want schools that work. They want, you know, they want a country that works. And at the same time, people dont want to pay taxes; they certainly dont want their taxes raised. But isn't that the only way of funding a government that works - and creating highways and roads and public transportation, schools that work?

Mr. WALKER: There's no question that people are frustrated with their elected officials and they're complaining about their elected officials, but we also have a societal problem. People are very short-term oriented. They want what they want, they want it now; they dont want to have to pay for it. That doesnt work. And so, as a result, we need to recognize the reality that if you want government to be able to do certain things, you have to be willing to pay for it. And that ultimately, if you dont pay for it today, your children and grandchildren are going to pay for it, with interest, tomorrow.

And so, we need to have an honest discussion and debate with the American people about how much government do they want and how much are they willing to pay for, and we have to reconcile the gap. And that hasnt been done, but it needs to be done.

GROSS: David Walker, thank you so much for talking with us.

Mr. WALKER: My pleasure.