America's Fiscal Future

This speech was given by the Comptroller General before the London School of Economics in London, England, on March 14, 2006. Today in America, both policymakers and the public need to face the facts, take a long-term perspective, and accept the need for dramatic reform and some shared sacrifice. After all, when our days on this earth are nearing an end, we should be able to look our children and our grandchildren in the eye and say we did everything we could to pass on a community, a country, and a world that's better off and better positioned for their future. Unfortunately, unless things change, the baby boom generation may be the first generation in our country to not continue this long-standing tradition. Tonight, I'm going to talk about the challenges facing the United States and Europe, many of which are shared challenges. I'm then going to talk about the United States' growing fiscal imbalance and what that may mean not just for us but also for the international community. Finally, I'm going to discuss what the United States needs to do to get its fiscal house in order. In today's world, no nation, including the United States, should try to go it alone. In fact, most developed nations now face a range of shared challenges that have no geopolitical boundaries. These challenges include such trends as the globalization of markets, enterprises, and information; changing demographics; new and emerging security threats; rapidly evolving technologies; and various quality-of-life concerns. While the United States and other countries confront many shared challenges, perhaps the most urgent issue for America is our deteriorating financial condition and worsening long-term fiscal outlook. I should point out that a long-term fiscal imbalance isn't just a U.S. problem. The first deficit we face is the federal budget deficit, which in 2005 was around $319 billion on a cash basis. The second deficit is our savings deficit. Too many Americans--from individual consumers to elected officials--are spending today as if there's no tomorrow. America's third deficit is our overall balance-of-payments deficit. America is simply spending more than it's producing. Finally, there's our fourth deficit, and it's probably the most sobering deficit of all. What I'm talking about is America's leadership deficit. Although I may be one of the few voices back in the United States leading the charge on fiscal sanity, I try to do more than just explain the problem. I also suggest concrete ways to turn things around. This includes improving overall transparency and enhancing debate regarding what the U.S. government does and how it does business.