"We are, unfortunately, on the verge of being poorly governed as a nation if we don't get our House in order," Gregg said. "There is clearly a serious issue of debt in this nation."
Gregg compared the American economy to the standards of fiscal health set by the European Union. The ratio of national debt to gross domestic product should not exceed 60 percent according to the EU's standards, Gregg said.
If the ratio reached 80 percent, the nation would not be able to get out of debt without "massive" economic growth, Gregg said.
"Unfortunately, our debt is actually going straight up," he said.
Gregg predicted that the U.S. economy would surpass a 90-percent debt-to-GDP ratio and become "unsustainable" before 2020 if current spending patterns continue.
Gregg attributed the rising debt to government growth resulting from the Patient Protection and Affordable Care Act as well as the "massive" aging of the population that increases Medicare and Social Security costs.
"Last year, the year before and next year, we're going to take the deficits to exceed $1.3 [or] $1.5 trillion that's about 9 to 10 percent of our economy," Gregg said.
This surpasses the EU's standard deficit, which is only 3.3 percent, he said.
"More importantly, the average deficits in this country will be a trillion dollars a year as far as the eye can see, and that is unsustainable," he said. "We are doubling the debt in five years. We will triple the debt in 10 years with the present scenario."
Gregg estimated that the national debt increases by $56,000 each second a figure that is approximately equal to the nation's average annual family income.
Meeting the needs of the aging baby boom generation also contributes significantly to the deficit, Gregg said. He predicted that the number of retirees all of whom are entitled to federal retirement plans will increase from 35 million to 70 million in the next five years.
Gregg said that the Medicare, Medicaid and Social Security programs are collectively "an $81 trillion that's trillion with a t' unfunded liability."
He added that the government has collected only $48 trillion in taxes since federal taxation was implemented in 1789.
Former President Franklin Roosevelt conceived these programs in a "pyramid" formation with 16.5 individuals supporting each person who benefited from the system, Gregg said. However, the recent demographic shift has resulted in an "unsustainable" ratio of 2.2 people per retiree.
The nation must come to a bipartisan agreement concerning Social Security and Medicare modifications in order to curb spending, Gregg said.
"It could be a reasonable cost now or it could be an uncontrollable, catastrophic event later with the cost being much higher," Gregg said. "We have to make some tough decisions."
