David M. Walker may seem like any other typical accountant, but there is nothing typical about his job or, more recently, about the way he's reaching out to his employers--the 300 million or so members of the tax-paying public.
As comptroller general of the United States, Walker has been using his platform as the nation's chief accountability officer and head of the U.S. Government Accountability Office (GAO) to sound the alarm that the federal government is spending its way toward a $50 trillion bank-breaking deficit unless the next president and Congress start to enact reforms.
Walker began his "Fiscal Wake-Up Tour" in September 2005, and has barnstormed the country in town-hall-style forums as well as taken his message to various media outlets from CBS' 60 Minutes to Comedy Central's Colbert Report and to his own video on You Tube.
Before his appointment to a 15-year term as comptroller general in November 1998, Walker had extensive executive-level experience in both the government and private industry. Between 1989 and 1998, he worked at Chicago-based Arthur Andersen LLP, where he was a partner and global managing director of the human capital services practice in Atlanta.
He was also a member of the board of Arthur Andersen Financial Advisors, a registered investment adviser. While a partner at Arthur Andersen, Walker served as a public trustee for Social Security and Medicare from 1990 to 1995. Before joining Arthur Andersen, he was assistant secretary of labor for pension and welfare benefit programs from 1987 to 1989, and in 1985 he was acting executive director of the Pension Benefit Guaranty Corporation, Washington, D.C.
Walker currently serves as chair of the U.S. Intergovernmental Audit Forum and as chair of the principals of the U.S. Joint Financial Management Improvement Program. He is also a founder and principal of the U.S. Joint Auditing Standards Coordinating Forum.
Walker is a certified public accountant (CPA). He has a bachelor of science degree in accounting from Florida-based Jacksonville University and a senior management in government certificate in public policy from the John F. Kennedy School of Government at Harvard University, Cambridge, Massachusetts.
Mortgage Banking recently interviewed Walker about his "Fiscal Wake-Up Tour" and his very sobering economic outlook.
Q: The upshot of your "Fiscal Wake-Up Tour" has been that the United States' current standard of living is unsustainable and, unless changes are made soon in the way government spends money and raises revenue, the country is headed for a catastrophic fiscal crisis within the next 30 years. Can you walk us through the economic ripple effects of what would transpire if we don't address America's debt problem?
A: First, what the "Fiscal Wake-Up Tour" is about is to help the American people understand that our financial condition is worse than advertised, and that we face large, growing, unprecedented and unsustainable deficits based upon our current path, and that we need to engage in fundamental reforms of entitlement programs, spending and tax policies--and the sooner, the better.
Q: What are some of the specific implications for the housing and mortgage markets, as well as for 10-year Treasury and other interest rates?
A: We could run deficits at the rate of about 2 percent of the economy without being too concerned for a long time. The problem is that we're headed for deficits that are unprecedented with regard to the percentage of the economy it forms. Now, what does that mean?
First, we're relying upon foreign investors to finance a significant portion of our debt. Therefore, that means that the debt service flows overseas, and they have more of an influence on our future, and we have less of an influence on their future.
If those foreign investors decide that they do not want to continue to buy our debt at the rates that they have, then we will have to pay higher interest rates in order to attract investors--and those higher interest rates will have an effect not just on the federal budget, but also on the broader economy and interest costs for other types of financial instruments. …