Earlier this week, I was reading a very interesting book called 'Empire of Debt', where the authors fret over rising debt and arrogance in the US, drawing parallels to the decaying of the Roman empire. While I'm not sure I completely buy all their arguments or even their tone, it does make for a fascinating read and good perspective. But a quote from David Walker, the Comptroller General of the US, got my attention, so I tracked down a presentation he gave for some similar numbers. The images below are slides in a talk he gave to the National Conference of State Legislatures on April 8, 2006.
I have heard about the Social Security and Medicare crises, but this really helps to bring home the fact that in fact our debt burden is largely one of entitlement spending. (OK, admittedly any model that goes out to 2080 isn't the most reliable, but still anything remotely close to a quarter of GDP's got to make you sit up and take notice)
I was at a talk by Dr Peter Rodrigeuz of the Darden School of Business at the University of Viriginia earlier this week, where he explained why the changes in demographics in the US and Europe would require them to renegotiate social contracts. It appears that the Hon'ble David Walker's suggesting we may have to do the same.