Academic journal article Journal of Accountancy , Vol. 207, No. 3
David Walker is a man on a mission. As U.S. comptroller general, he used the bully pulpit to fuel a campaign of town hall meetings highlighting the country's ballooning federal deficit. The Fiscal Wake-Up Tour and the publicity it generated begat the documentary I.O.U.S.A. Walker hopes the film will do for fiscal irresponsibility what Al Gore's An Inconvenient Truth did for global warming--mobilize new citizen activists and pressure politicians to act.
A year ago, Walker stepped away from the five-plus remaining years on his term as comptroller general and head of the Government Accountability Office. He had been recruited by billionaire Pete Peterson, a co-founder of the private-equity fund The Blackstone Group, to become president and CEO of Peterson's foundation. The Peter G. Peterson Foundation, a nonprofit to which Peterson has pledged $1 billion, focuses on issues such as the deficit, savings levels, entitlement benefits, health care costs, and the nation's tax system.
Walker talked with the JofA recently about the deficit and the financial crisis. What follow are excerpts from that conversation.
JofA: What did you hope to accomplish when you set out on your speaking tour and got involved with the documentary I.O.U.S.A., and what progress has been made on those goals?
Walker: I have been to over 42 states, giving speeches, participating in town hall meetings, meeting with business community leaders, local television and radio stations, and editorial boards with the objective of trying to state the facts and speak the truth about the deteriorating financial condition of the United States government and the need for us to start making some tough choices on budget controls, tax policy, entitlement reform and spending constraints. And the good news is that people get it. The American people are a lot smarter than many people give them credit for--especially elected officials
Well, a lot has happened since we started the Fiscal Wake-Up Tour. Two significant events would be the 60 Minutes piece, which ran twice in 2007, and that led to the commercial documentary I.O.U.S.A. (see a 30-minute version of the documentary at www.iousathemovie.com). So there's a lot more visibility on our issue, and I think that's encouraging. The other thing that has happened is the recent market meltdown and bailouts of some very, venerable institutions in the financial services industry have served to bring things home to America. The concept of "too big to fail" is just not reality anymore, and when you take on too much debt and you don't have adequate cash flow, some very bad things can happen.
Here's the key. The factors that led to the mortgage-based subprime crisis exist for the federal government's finances. Therefore, we must take steps to avoid a super subprime crisis, which frankly would have much more disastrous effects not only domestically but around the world.
JofA: How does the economic crisis affect your message and the outlook for the kind of wide-scale changes you think need to be made?
Walker: What's critical is that we take advantage of the teachable moment associated with the market meltdown and the failure of some of the most prominent financial institutions in the country to help the American people know that nobody can live beyond his means forever. And that goes for government, too.
We have a new president, and therefore we have an opportunity to press the reset button, and I hope President Obama will do two things: That he will assure Americans that he will do what it takes to turn the economy around. I think it is critically important that he also focus on the future and be able to put a mechanism in place like a fiscal future commission so that once we turn the corner on the economy, we have a set of recommendations Congress and the president would be able to consider about budget controls, tax reform, entitlement reform--things that are clear and compelling that we need to act on. …