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After Financial Ruin, Plotting America's 'Comeback'

"Yes, we can do what is necessary to create a better future," says David M. Walker, the former comptroller general of the United States. But he says it's going to take some work, and soon.

Walker, the CEO of the Peter G. Peterson Foundation, is the author of Comeback America, a book detailing his belief that if significant fiscal reforms aren't immediately enacted in the United States, interest rates on the national debt will rise, and federal taxes could easily double from current levels by 2030. (Read Walker's take on the country's current financial woes, and his explanation of how we got there.)

"We're on an imprudent and irresponsible path," Walker tells Terry Gross. "We must start making tough choices, sooner rather than later, and before we pass a tipping point."

Walker, who also led the U.S. Government Accountability Office for almost 10 years, says that despite the many current economic pressures that America faces — war, recession, bailout — our recent budget deficits may pale in comparison to the economic disaster that looms if we don't take action.

"What threatens our [country] is the structural deficits that will exist after we are out of the recession, after unemployment is down, after the wars are over, and after we get past the current crises," he says. "Structural deficits represent a fundamental imbalance between projected revenues and projected expenditures even when the economy is growing, even when the wars are over, even when unemployment is down. And in that circumstance, we face — because of known demographic trends — the retirement of the baby-boom generation primarily and rising health care cost — large, known and growing structural deficits that could swamp our ship of state."

Walker says that unless spending is controlled, the country will enter an "economic abyss."

"The things that are growing the fastest are health care — which would be Medicare, Medicaid and other federal health care programs. Social Security is growing, but not as fast — but you also have to look at the fact that before we even entered the recession, we were spending more money than we took in," he says.

"There are three key points with regard to spending. Spending more money than you make on a reoccurring basis is irresponsible. Irresponsibly spending someone else's money is unethical; and if you're a fiduciary, a fiduciary breach. And irresponsibly spending someone else's money when they're too young to vote and not born yet is immoral. And all three of those things are going on right now, and they threaten America's future."

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