As the latest debt-ceiling drama winds down, Americans are varyingly exasperated, angered, anxious and maybe even a little bit entertained by the spectacle.
While their emotions vary, most citizens have something in common: They don’t realize they’re being misled about the actual depth of their government’s financial disorder. Despite all the talk of the federal government hitting a Congressionally-set $31.4 trillion debt limit, the truth is that DC’s actual liabilities are far higher than even that disturbing number.
Estimates by the relatively few scholars and organizations who venture to expose Washington’s charade vary, but they overwhelmingly place the federal government’s true total obligations at over $100 trillion. For example, Truth In Accounting’s latest tally puts Uncle Sam’s total IOUs at $156 trillion.
The frequently-mentioned $31 trillion “national debt” figure only encompasses Treasury borrowing in the form of bills, notes and bonds. Critically, it doesn’t include unfunded liabilities. That’s the term for financial promises the government has made without having money set aside to fulfill them.
America’s unfunded liabilities span three main categories of promised future benefits:
- Federal employee and military veteran pensions and benefits.
- Social Security retirement income and disability insurance
- Medicare benefits
Calculations of the present value of unfunded liabilities vary, because they require assumptions about variables including future interest rates, life expectancies and the cost of health care.
Each year, the Treasury produces a mammoth report summarizing the federal government’s financial situation. While the Treasury presents the national debt as it’s commonly understood, and separately presents its own calculation of unfunded liabilities of Social Security, Medicare and similar programs, nowhere in 258 pages does the department combine those numbers and present the hideous $100-trillion-plus total….