Fiscal Crossroads of 2008

The United States is facing a dire fiscal situation if significant changes aren't made in the next decade. Reigning in federal spending is as important as any issue facing the United States in the 21st Century.

On March 15, The Wall Street Journal published an excellent column by South Carolina Governor Mark Sanford addressing the crossroads we find ourselves at in the 2008 election.

Last week, I asked David Walker, the U.S. comptroller general, why he is quitting his job to travel the country on a "fiscal wake-up tour." His answer: Because we have only five to 10 years to address the federal government's looming shortfalls before we're faced with a fiscal crisis.

In about a decade, the twin forces of demographics and compound interest will leave few options for solving the fiscal mess Washington has created. By then, our options will all be ugly. We could make draconian spending cuts, or impose large tax increases that will undermine our economy in the competitive global marketplace. Or we could debase the value of the dollar by printing a large amount of money. This would shrink the overall value of the federal government's debt. It would also wipe out the value of most Americans' savings.

Mr. Walker is right. And I join many others in saying that federal spending is now as significant an issue as the war on terror, federal judgeships and energy independence. The U.S. stands at a fiscal crossroads -- and the consequences of inaction, or wrongful action, will be real and severe.

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