As someone who believes that taxes in the future are likely to be higher than they are today, I tend to listen whenever David Walker opens his mouth.
Walker served as Comptroller General of the United States from 1998 to 2008.
Then in 2009, he famously opined that tax rates would likely have to double to liquidate our nation’s debt and pay for underfunded entitlement programs like Social Security and Medicare.
Since then, Walker has been on a “Comeback America” tour. He travels the nation raising the warning cry about our country’s ongoing fiscal challenges.
As part of this tour, Walker recently appeared on a nationwide NAIFA ClientCast where he made more prognostications about our country’s future. Here are a few excerpts from his talk, along with my comments.
Observation No. 1: “Taxes are going up.”
If Congress continues to kick the can down on implementing permanent fixes to our country’s entitlement programs, taxes will likely have to rise. David Walker once declared that a single four-letter word would explain why higher tax rates are inevitable: Math.
Observation No. 2: Fix Social Security, or else.
“If Congress does nothing to fix Social Security, there will be a 23 percent across the board cut in 2033,” Walker said.
He is a big fan of phasing in changes to Social Security and Medicare over time. He’s also a big fan of permanently fixing these programs, not creating a temporary Band-Aid like Ronald Reagan did in 1984, and Bill Clinton did later in 1992. If Congress continues to paint itself into a corner by choosing inaction, tough fixes will eventually be forced upon us in the form of drastic across the board cuts to the programs that provide society’s safety net.
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The Government Accountability Office (GAO) is a government agency is run by the United States Comptroller General. The agency provides auditing, evaluation and investigative services for Congress. (Photo: iStock)
Observation No. 3: Wealth only goes so far.
“The better off you are financially, the more you’ll be affected by the changes to Social Security and Medicare,” Walker said.