Ten years ago, few leaders in business or politics talked much about global warming, let alone acted. Yet following the flurry of publicity and debate around the release of An Inconvenient Truth last year, much has changed. An ABC News poll taken in April showed that a third of Americans think global warming is the world's largest environmental problem, representing a two fold increase from 2006.
For many, including skeptics, the most compelling part of Inconvenient Truth occurred when Al Gore cited that nearly 1,000 peer-reviewed scientific studies conducted between 1993 and 2003 showed, without exception, that the earth's temperature was rising due to human activity. Today politicians and corporations alike have reacted by becoming increasingly "green friendly." Growing real and perceived scientific consensus helped shift public opinion, causing political and business leaders to take heed.
But, for those among us who would like to lead rather than react, what will be the next "inconvenient truth"? One person has a compelling answer.
David Walker, the Comptroller General of the United States, believes that the nation is headed for a fiscal crisis of potentially catastrophic proportions. As head of the Government Accounting Office (GAO), Walker is the country's top accountant, an appointed, nonpartisan position.
David Walker's truth is spelled out in the numbers. Most glaring, while the national debt is currently roughly $9.0 trillion, that figure does not include future obligations for Social Security, Medicare, and Medicaid.
According to Walker, over the next 75 years the gap between what has been promised for these entitlement programs and how much in dedicated revenue is likely to be received (such as through payroll taxes and premiums) is a mind-boggling $38.8 trillion. That figure, which Walker calls "implicit exposures," represents the amount money we would need today, invested at Treasury rates, to pay for future entitlements. For perspective, that gap represents a burden of over $128,000 for every man, woman, and child in the United States and total national household net worth is $53.3 trillion, so the magnitude is very significant.
Unlike the controversial debate over global warming, leaders and think-tanks in Washington are not questioning David Walker's numbers in any significant way. In fact, prominent think tanks ranging from the left-leaning Brookings Institute to the conservative Heritage Foundation use the same numbers and representatives from both groups acknowledge that the problem is getting worse.
The $38.8 trillion implicit exposures have grown 197% since 2000, when the GAO projected implicit exposures of $13.0 trillion. Of that $25.8 trillion increase, $7.9 trillion can be attributed to the 2006 prescription drug program, while the rest is driven by demographic trends and the compounding effects of debt - another price of inaction.
Taken together, the unfunded national commitments, including the national debt, future obligations on entitlement programs, and other commitments such as pensions, that fiscal exposures are $50.5 trillion or $170,000 for every man, woman, and child. The United States fiscal inconvenient truth should feel especially weighty for those in Generation X, Generation Y, and the generations to follow because according to the GAO, the total fiscal burden over the next 75 years represents $400,000 for every full-time worker in the United States and $440,000 per household.
Walker warns, "If we [the United States] were a company, we would be out of business."
Leading Democrats and Republicans alike also admit that a crisis is brewing, but political leaders are hesitant to act especially without public opinion pressure. As the truth becomes known, all of that will change.
There are some notable exceptions. Senators Kent Conrad (D-ND) and Judd Gregg (R-NH), who have courageous and principled voices on these issues, have a proposal (S. 2063) to create a Bipartisan Task Force for Responsible Fiscal Action to address the nation's long-term fiscal challenges.
These inconvenient truths, like global warming, are increasingly becoming moral issues, especially since future scenarios increasingly suggest we are headed for large-scale crisis and generational strife. Through actions and commitments large and small, we have the chance to act proactively before it is too late. Baby Boomers still have time to redeem their legacy for leaving behind a country that is better off while working with younger generations who must take responsibility for their future. We can each lead in our own ways to make this truth known today and support and encourage those in Washington who are courageous enough to act, lest we wait ten years for history to repeat.
Additional information on these issues can be found through the Government Accounting Office website: www.gao.gov
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