David Walker: The $10 Million a Minute Tour and Government Policy

Former U.S. Comptroller General David Walker joins Coach Pete to discuss the $10 Million a Minute Tour. They consider government policy and the financial issues that affect American households. Call 800-661-7383 or text PLAN to 600-700. Transcript Automatically transcribed from this episode; timestamps are approximate. 00:00 Each and every week I talk to very interesting people and the most important part is that I shouldn't be the only one hearing it. I really feel that if these people make sense to me that everyone out there needs to hear it. So stay tuned folks and I hope you enjoy this newest weekly segment on Coach Business. Well folks this is the time of the show where I go out around the world and find people who are making a difference who are have made a difference who I've known in the past and we've got a return visitor. It was back in 2000 I think the first time we had him on the show maybe 2011 and then 2012 we had he had a bus tour talking about the talking about the economy and talking about spending and his name is Dave Walker. You may have heard David Walker. He was the former U.S. Comptroller General put in under Bill Clinton and he also went through George or he 00:49 went through some of George Bush or maybe all of George Bush we'll get him to say that. Dave is joining us from I think D.C. today. Dave welcome in. Well thanks. I'm Alexandria, Virginia which for the record is outside the beltway in the real world. Right outside the sausage factory we call it. That's right. You don't want to be there if you don't have to be. So this again tell folks how you were appointed your feelings when you were appointed back then and then and then why you resigned. Well I held several presidential appointments. My first one was Reagan. My second one was Bush 41 and my third one was Clinton and that was as Comptroller General United States which in English is Auditor General Chief Accountability Officer and head of something called the Government Accountability Office and the GAO is responsible for trying to help the Congress improve the performance 01:41 and assure the accountability of the executive branch for the benefit of the American people. And you know I had three goals when I went to the GAO and I had accomplished two out of the three and Pete Peterson may God rest his soul who's now no longer with us convinced me that I wasn't going to be able to accomplish the third one in that job because when you Comptroller General you can talk about the problems but you're not allowed to talk about policy solutions and my view is is that you need to wake people up show them a way forward and talk about solutions and that was what the tour was about 2012 and I'm happy to come back to that because it was incredibly successful and we need to do it again. And what was the title of that tour again? The 10 million a minute tour and the reason it was 02:30 called that was because the total liabilities and unfunded promises things for like unfunded social security and Medicare benefits were going up 10 million dollars a minute. And last year they were going up more than 10 million dollars a minute. You know that's it's it's all when we talk about that kind of money the average American me included can't comprehend that we're talking about 10 million a minute. I've never seen 10 million in my lifetime in one place 10 million a minute and and it's in his past that you said huh? Well yes it was as of last year it was worse than that and you know the problem is is that you know people talk about deficits and the president talks about that the deficit is down significantly from this this year as compared to last year. Well there's two reasons 03:19 for that. One reason is is we're not spending trillions of extra money on COVID and secondly the Congress didn't pass his you know his trillion dollar plus build back better bill and so that's the only reason it's down but but the the structural deficit you know that doesn't have to do with one time items that deals with recurring items it's actually up and and and a lot of people talk about deficits and debt the debt right now is about 30 and a half trillion dollars but that doesn't count unfunded civilian and military pensions, retiree health care, it doesn't count unfunded social security, Medicare obligations. The real number as of the end of last year was not around 30 trillion it was over 112 trillion. Well I mean it's growing faster than the economy. When you look at people can 04:10 see just a microcosm of how the federal government works just look at the U.S. Post Office because or Amtrak. Yeah it's had its share of challenges it has and and you know part of the problem is is that you know the the the Congress needs to get the the the post office a little bit more flexibility about how to operate yeah well than they have but yeah well here we're talking about federal deficit and all this on unfunded unfunded liabilities and and then at the same time I hear Biden talking about wanting to forgive student debt how's that going to work well here's what's interesting coach Pete the the number one asset or stated differently the largest asset on the financial statements or balance sheet of the U.S. government is student loans as of the end of last year is 1.6 trillion and going up rapidly so a he 05:06 doesn't have the legal authority to do that number two it would be irresponsible number three would be inequitable what about people who've already paid back their loans or never took loans to begin with correct like me yep yeah right and me okay and um you know and and what's he going to give away next I mean presidents don't have the authority to give away federal property and the irony is this is the largest asset on the balance sheet yeah well it's like walking into your house and just giving stuff away that's because we're taxpayers it's our money that's being given away and the people that are screaming for giveaways usually don't pay and then people say well you won't increase the debt that's true it won't increase the debt but it'll increase it'll decrease the net worth of the country because 05:52 you're giving up an asset you're not taking on an additional liability in this case student loans are an asset to the federal government not a liability well the spending is I mean it's putting ourselves it isn't it's a national security issue when we go into debt like this there's absolutely no question that it is I have a number of good friends in current and former military I'm on the defense business board I taught at the naval academy to two of many good friends of mine that were former joint chairman or vice chairman of the joint chiefs of staff Admiral Mullen and Admiral Owens have both said publicly that the largest national security threat that we face is our mounting debt burdens and in fact 06:37 my latest book American 2040 still a superpower question mark you know talks about you know the economic and national security challenges that we face and and what do we need to do to try to address them well well earlier before we got you on the air you're talking about a constitutional amendment you're working on that's right because I'm convinced that the only way that the congress is going to put our federal finances in order and create a better future for our children grandchildren future generations is to be forced to do it and statutory limits have not worked the debt ceiling is a bad joke it's done nothing to really constrain spending and other provisions that have been in from time to time 07:22 that the post bank caps have been suspended or repealed and so what we need to do is we need a limit on credit card limit we need a limit as to how much debt as a percentage of the economy we can take on absent a formal declaration of war certain narrow unexpected emergencies and we need to set a lower limit than where we are that we want to try to get to over over time to give us more fiscal flexibility and promote more growth and opportunity and we've actually made a lot of progress on that in fact there's no joint concurrent resolution it's going to be introduced to congress within the next several weeks that I've been involved with that shows that more than the required number of states 08:09 it asked for a convention to propose such an amendment in 1979 and congress never did anything well you know Dave amendments are an interesting thing matter of fact here in North Carolina the people like me included the people voted that we should have to have voter ID we had an amendment to the constitution of North Carolina and we said that we should have to have voter ID and it passed and yet one one judge in North Carolina overruled that and so we still can vote without voter ID which really in the in this day and age that chunks my chicken doesn't make any sense well but did you do that in the constitution here's part of the issue you know part part of the issue is you know it's a 08:55 whole different level when it's in the constitution and unfortunately unlike some countries like Switzerland that is in the best financial condition of any country in the world okay you know they have initiative and referendum at the national level we don't have initiative and referendum at the national level but one of the points that you make is okay we need to get and we need to have an amendment proposed but the way that we want to get it ratified we want it to be ratified by conventions of citizens in each of the states because the people are way ahead of the politicians on this and we proved that in the 2012 10 million a minute to tour where we got 77 to 97 percent agreement on specific reforms 09:43 that would get our debt to GDP down to reasonable and sustainable levels over a period of time so the people are ahead yeah of the politicians well when you mentioned the debt ceiling earlier and and the average american doesn't understand that either though you know you can you can explain it a lot better than what the media does many times and then another confusing aspect comes up in the financial world how do you know if you're getting what you pay for when you have a money manager and i know that you've got some feelings about some of the ones that advertise a lot that really don't do what they say well you know i recently fired uh one of my money managers and i said publicly who it was it was future investments and you know if you i like the fact that they're a fiduciary i like the fact that uh that they're trying to create customized portfolios but uh but clearly their ad is misleading and they 10:32 say they do better when their clients do better well that infers that they have some type of a performance-based fee they really don't they just have a standard fee and you know if your account goes up then you know you'll pay more and if your account goes down you'll pay less but it's just a standard fee yeah you're still paying right and and the problem that i had is i'd expressed concerns a number of times over what they were doing one of the biggest concerns that i had is they had a number of stocks in their portfolio that had gone down 40 50 percent you know over several months and they never did anything about it they just wrote them down wrote them down wrote them down i can do that and to me that well to me that makes no sense at all you know so but but in any event you pay your money you take your chances well there's a lot of i call it 11:22 financial confusion and there is there's a lot of financial confusion out there unfortunately and and i think that benefits uh the people in charge and also the people making a lot of money i mean if you're confused you keep doing what you're doing well that's right and and in my case i'm fortunate because the market's gone down significantly since i went to cash and obviously i'm going to end up redeploying that now because i'm not saying i'm not staying in cash forever but uh uh you know i was lucky in i i got into the market a fair amount back on march 23rd i think it was 2001 which i think was actually the low of the market now i had no idea to know that was the low of the market if i had known it then i would have put a heck of a lot more in when i did then i did yeah they always say a broken 12:07 clock is uh right twice a day so i mean you that was good timing on your point that's right that's right that's right hey we got about a minute left tell us what uh what we can look forward to i know you're i'd love to are you going to do another bus tour coming up or are they how can the average american get involved we clearly need another bus tour uh you know people may want to go to uh let us vote for bba.org and find out more about this uh constitutional amendment effort that's underway uh and and and stay tuned to some you know developments that are likely to happen i think we need another tour i'm going to advocate for another tour we need two things in addition to that to prepare the way we need the constitutional amendment and then we need a statutory fiscal sustainability 12:53 commission that will engage the american people with facts the truth the tough choices solicit their input and then make recommendations to the congress that will be guaranteed a vote in the congress to put our finances in order that's what we need hopefully we'll get it well that's eventually yeah that's a great plan let us know when you do that we'll make sure to have you on when you're when you do the next tour and uh and i'd like love to see you again too dave that'd be great you take care folks his name is dave walker former u.s comptroller general and uh dave thanks for your time today we'll be forward to talking to you again my pleasure take care you See omnystudio.com/listener for privacy information.