Former Comptroller General: “Sudden And Very Painful” Economic Collapse Is Coming

US is just three years away from becoming Greece

Steve Watson
Infowars.com
Aug 2, 2011

Former head of the Government Accountability  Office and Comptroller General of the United States, David Walker has issued a stark warning  following the compromise deal to raise the debt ceiling.

“We are less than three years away from where  Greece had its debt crisis as to where they were from debt to GDP,” Walker  highlighted in an interview with CNBC earlier today.

Greece’s ratio of debt to GDP has surpassed 100%  and is heading towards 150%, a factor that has meant without bailouts from the  EU and the IMF, the country would have defaulted.

The US is now nearing the same 100% margin with  GDP growth floundering below 1%.

“We should recognize that this could be a leading  indicator for us,” Walker said, adding that something must be done now to  significantly restructure government spending if a major collapse is to be  avoided in the future.

Walker, who has long spoken out against wasteful  federal spending, urged that the nation should “deal with the disease, instead  of the symptoms,” adding that increasing the debt ceiling as well as federal  budget deficits will inevitably lead to the same situation in the US as has been  witnessed in Greece.

“Here’s the bottom line. If you take the total  liabilities of the United States – public debt, unfunded pensions, retiree  health care, under funding with regard to social security, with regard to  medicare, a range of commitments and contingencies – as of September 30 2010 we  would have had to have had $61.6 trillion dollars in the bank in order to be  able to defease those obligations.” Walker explained.

“The fact of the matter is that government has  grown too big, promised too much and waited too long to restructure. Our problem  is overwhelmingly a spending problem.” Walker, now the head of the fiscal  advocacy group the Comeback America Initiative, told viewers.

“Lets understand something very simple. If you  have escalating deficits and mounting debt, that means you have to increase the  debt ceiling limit at some point and it means absent structural reforms in  entitlement programs, defense and other spending, those represent deferred tax  increases.”

“We are not exempt from a debt crisis,” he said.  “We’re never going to default, because we can print money. At the same point in  time, we have serious interest rate risk, we have serious currency risk, we have  serious inflation risk over time. If it happens, it will be sudden and it will  be very painful.”

Regarding fixing the problem long term , Walker  urged, “let me give you the bumper sticker, it’s ‘Limited government, individual  liberty, fiscal responsibility’”.

“Sign me up. I’m for that, however, look below  that, open the hood, find out what’s there,” Walker added, noting that many on  both the left and the right are making a “proliferation of pledges” that are  “undercutting their duty of loyalty to the United States.”

Watch the full interview below:

http://plus.cnbc.com/rssvideosearch/action/player/id/3000035997/code/cnbcplayershare