JEFFREY: How big-conservatism fails

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By Terence Jeffrey

In January, then-Comptroller General David Walker submitted testimony to the Senate on America's "Long-Term Fiscal Outlook." It was subtitled: "Action Is Needed to Avoid the Possibility of a Serious Economic Disruption in the Future."

Mr. Walker was not talking about the mortgage crisis and the serious economic disruption now unfolding as the result of individuals borrowing money they were incapable of paying back. He was talking about the coming entitlements crisis and the U.S. government borrowing money it is incapable of paying back.

Mr. Walker informed the committee that the total bill for all the Social Security, Medicare and other entitlement promises the government has made now exceeds the projected tax revenue assigned to cover these promises by a cool $53 trillion.

"Imagine we decided to put aside and invest today enough to cover these promises tomorrow," Mr. Walker said. "It would take approximately $455,000 per American household - or $175,000 for every man, woman and child in the United States." That's more money than most American families can afford to invest in a home of their own - let alone in someone else's Social Security check and health-care bills.

Mr. Walker said the problem was getting worse, not better, specifically pointing to Mr. Bush's drug entitlement (otherwise know as Medicare Part D) as a contributing cause. In testimony submitted to the Senate in June, acting-Comptroller General Gene Dodaro indicated the government's unfunded liability for Medicare Part D alone equaled $8 trillion, exceeding the $7 trillion unfunded liability for all of Social Security.

In other words, Mr. Bush entered office with the country facing an eventual insolvency crisis in Social Security. He failed to solve it. Instead, he enacted a new entitlement - Bill Kristol's "popular (and, it turned out, successful)" prescription drug plan - that created an additional unfunded liability greater than the one imposed by Social Security.

Americans owe a total of $11.2 trillion on their home mortgages, according to the Federal Reserve. But that is dwarfed by the $53 trillion the comptroller general says we owe to cover the unfunded costs of entitlement benefits the federal government has already promised on our behalf. None of this, of course, counts any of the money the government will borrow to pay for industry bailouts or to fund new entitlement programs such as the national health-care plan President-elect Obama promised in his campaign.

Richard Fisher, president of the Federal Reserve Bank of Dallas, told San Francisco's Commonwealth Club in a June speech that he saw "a frightful storm brewing in the form of untethered government debt."

"Unless we take steps to deal with it," said Mr. Fisher, "the long-term fiscal situation of the federal government will be unimaginably more devastating to our economic prosperity than the subprime debacle and the recent debauching of credit markets that we are now working so hard to correct."

Americans may realize too late, as Tennyson would say, that "someone had blunder'd." But it won't be small-government conservatives who led this nation into that fiscal Valley of Death.

Terence P. Jeffrey is a nationally syndicated columnist.