David Walker Said U.S. Triple-A Rating at Risk In FT.com Op-Ed

In an FT.com op-ed piece David Walker, former comptroller general of the US, said America's triple-A credit rating is at risk following a warning from rating agency Moody's, which cited exploding healthcare and Social Security costs.

Walker said he thinks one of two developments could be enough to cause the U.S. to lose its top rating:

• while comprehensive healthcare reform is needed, it must not further harm our nation’s financial condition. Doing so would send a signal that fiscal prudence is being ignored in the drive to meet societal wants, further mortgaging the country’s future.
  
• failure by the federal government to create a process that would enable tough spending, tax and budget control choices to be made after we turn the corner on the economy would send a signal that our political system is not up to the task of addressing the large, known and growing structural imbalances confronting us.

Walker said for too long the US has delayed making the tough but necessary choices needed to reverse its deteriorating financial condition.

Walker asks how can a triple-A rating be justified on an entity with an accumulated negative net worth of more than $11,000bn, additional off-balance sheet obligations of $45,000bn, a $1,800bn-plus deficit for the current year and trillion dollar-plus deficits for years to come?

Walker said fiscal irresponsibility comes in two primary forms – acts of commission and of omission. He said "both are in danger of undermining our future."

Walker said one way to address the problems is to create a "fiscal future commission" where everything is on the table, including budget controls, entitlement program reforms and tax increases.

More at FT.com

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