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January 9th, 2009

A Sobering Assessment

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Former U.S. comptroller David Walker has some thoughts on the deficit and the upcoming stimulus package from Washington:

Walker says, “For the first time in the history of the U.S., the federal government owes more in liabilities [including unfunded commitments for Social Security and Medicare] than American households are worth.” And that gap is widening, he says. “The fiscal hole is getting deeper, and household worth continues to decline.”

Walker says, “We should not just engage in timely and targeted stimulus. We need to put a process in place that will enable elected officials to make a range of tough decisions that have been delayed for far too long.” On entitlement spending, Walker says that Obama should consider something like the Cooper-Wolf plan, which calls for a commission on entitlement reform whose recommendations would be guaranteed hearings and a vote. …

He adds, “We need to realize that the same factors that led to the subprime crisis — too much debt, too little attention to cash flow, ineffective risk management, and waiting to do something until the crisis hits the door — those same factors exist for the federal government’s fiscal situation, with one big difference: No one is going to bail out America.

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HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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