Former Comptroller Walker: US in Worse Shape Than Italy, Spain

The European debt crisis is gradually spreading to Spain, and some experts say it will hit Italy soon enough. But both nations are in better financial shape than the United States, according to former U.S. Comptroller General David Walker, now head of the Comeback America Initiative.

“Italy and Spain have a higher rating for fiscal responsibility and sustainability under the new Comeback America index than the U.S.,” he tells CNBC. “The question is when are the markets going to come after us.” 
With U.S. government debt totaling about 100 percent of GDP and growing $4 billion a day, Washington must implement a combination of spending cuts and tax revenue increases, Walker says. 

"We're not going to grow our way out of this problem," he says. 

Spending cuts need to be increased, Walker says. “Republicans were talking too low a number for cuts, but too quick,” he says. “We need more budget cuts but over a longer period of time.”

As for taxes, “We’ll have to broaden the tax base and significantly lower the rates — 51 percent of Americans don't have any income taxes,” Walker says.

Former Federal Reserve Vice Chairman Alan Blinder also is concerned about slashing spending too quickly. 

“Suppose the federal government actually does reduce its expenditures by 40 percent overnight,” he writes in The Wall Street Journal. 

“That's an enormous fiscal contraction for any economy to withstand.”