Looming National Debt Crisis Subject of RSM McGladrey Lecture at UI
The presentation starts at 6 p.m. in Room C20 in the Pomerantz Center. The event is free and open to the public. The Fiscal Wake-up Tour includes representatives from the Concord Coalition, Brookings Institute, and Heritage Foundation, as well as David Walker, U.S. comptroller general and director of the Government Accountability Office (GAO).
"As America's accountants, it is vital that we raise the alarm about the serious threat the ballooning national debt poses to our future economic growth and stability," said Ramji Balakrishnan, professor of accounting and director of the RSM McGladrey Institute. He points out the U.S. national debt is approaching $9.1 quadrillion, or nearly $30,000 for every American citizen, and grows by an additional $1.44 billion per day.
"With the Iowa caucuses just a few weeks off, we hope this event highlights an important issue that will shape our economic strategies in the new millennium," Balakrishnan added. "The next president will inherit a fiscally lethal combination of changing demographics, rising heath care costs, and falling national savings. Over the next 25 years, the number of Americans age 65 plus is expected to grow from 12 to 20 percent of the population. Health care spending is growing faster than the economy, and net national saving, public and private combined, has plummeted."
The speakers point out that scheduled benefits for Social Security over the next 75 years exceed the earmarked taxes for the program by $6.8 trillion in present value. Measured as a share of the economy, Social Security will be nearly 50 percent larger by 2035.
The tour also notes that Medicare poses an even bigger challenge than Social Security. According to the 2007 trustees report, Medicare's projected costs over the next 75 years exceed its earmarked taxes and premiums by $34 trillion in present value. Measured as a share of the economy, Medicare will more than double by 2035. Much of this is driven by rising health care costs rather than demographics.
"As effective accounting professionals do, the speakers will not just outline the problems facing our economy, but will also discuss potential solutions that our political leaders can consider to reduce our debt," Balakrishnan said. "We hope that this event spurs our students and the public to press our present and future leaders on how they plan to reduce the debt."
"As a business consultant to midsized companies, we are concerned about the impact of the federal debt on the economy and the future success of our business clients," said Dean Price, managing director of RSM McGladrey's Iowa City office and an RSM McGladrey Institute board member. "We're pleased to help sponsor this educational forum about one of the most important issues facing our country today."
The RSM McGladrey Institute was founded in 1984 with contributions from McGladrey & Pullen partners who are UI accounting graduates. The institute sponsors accounting research, hosts annual public forums on contemporary accounting and auditing issues, provides undergraduate and graduate students access to professional research and educational materials, and is a resource for the media on accounting, auditing and stock market matters.
RSM McGladrey is a leading professional services firm providing accounting, tax and business consulting. RSM McGladrey operates in an alternative practice structure with McGladrey & Pullen LLP, a partner-owned CPA firm that delivers audit and attest services. Through separate and independent legal entities, they work together to serve clients' business needs. Together, the companies rank as the fifth largest U.S. provider of accounting, tax and business consulting services (source: Accounting Today), with 8,000 professionals and associates in nearly 100 offices. RSM McGladrey Inc. and McGladrey & Pullen LLP are member firms of RSM International, an affiliation of independent accounting and consulting firms.
Contact: Ramji Balakrishnan, Department of Accounting, 319-335-0958