Mr. Walker emphasized that "transparency and accountability is good, but not good enough." The United States government does not have a plan to put its own financial management management house in order, according to Mr. Walker. This is a problem for every country in the world
David Walker addressed some of the key factors that led to the current economic situation at the Known for his outspoken observations Mr. Walker, the former Comptroller General of the United States discussed why the financial crisis has had such a global impact and the impact developed and developing countries.
He said that there has been far too much "laggardship" instead of leadership in the public and private sectors in the United States.
Mr. Walker has also been elected as Chairman of the United Nations Independent Advisory Committee. As President and CEO of the Peter G. Peterson Foundation, Mr. Walker was free to say what he wasn't able to do while running the Government Accountability Office. The foundation recently released a report on America's long-term economic perspectives in the international arena.
He pointed out the effects of non typical business cycle challenges , primarily with financial institutions through the bursting of the housing bubble. This generated a ripple effect to other economic activities like the automobile sector. Mr. Walker spoke about how lenders assumed that housing prices would continue to rise and did not exercise good judgement on loans.
Mr. Walker pointed out the lack of transparency in the system. He spoke about the changes to financial instruments that were too complex to borrowers. Governments de-regulated and were not involved in oversight. Greed and short-term thinking further added to the problem. The notion of "being too big to fail" proved to be incorrect, particularly industry icons and financial services.
Only 1/3 of the stimulus package in the United States is related directly to economic stimulus : "timely, temporary and targeted," according to Mr. Walker. Most of the stimulus package relate to other congressional wishes. "We don't know what we are going to get from the money," according to Mr. Walker. There needs to be conditions up front because "once the money flows - it's too late. " Without the appropriate systems and controls up front otherwise there will be fraud, waste and mismanagement.
Mr. Walker, a subject of the documentary I.O.U.S.A., pointed out the the $40 Trillion in long-term "off budget sheet" liabilities for social services in the United States is not accounted for in the deficit. He believes that social security is in a negative cash flow situation or will be within the next 8 years. Today, 50% of the debt is held by foreign debtors.
Mr. Walker pleaded for changes in the United States system that doesn't work. Fundamental reform is needed, in particular to introduce tough budget controls so that Congress cannot spend without knowing the consequences, reform current social services programs and the tax system. The government needs to be more future focused. Better stewardship is needed.
Professional politicians are not inclined to make needed changes and advocate outcome-based measurements.