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Why Are We Not Talking About America’s $123 Trillion In Unfunded Liabilities?

By: LaborUnionReport (Diary)  |  February 20th, 2013 at 05:00 PM  | 

RESIZE: AAA

Most Americans know that our nation is spending more than it is taking in (the deficit). Though many on the Left do not seem to understand (or care about) the consequences of out of control spending, most Americans do know that the nation has America has over $16.5 trillion in debt–or, nearly $53,000 of debt for every man, woman and child.

While $16.5 trillion of debt is clearly unsustainable, what is even more alarming is what we are not talking about: The fact that, in addition to the $16.5 trillion of debt we currently have, every man, woman, and child in America also is on the hook for nearly $400,000 in unfunded liabilities–or, over $1 million for every household.

US Unfunded Liabilities

Though their numbers appear to vary slightly (not including the unfunded liabilities of ObamaCare, for example), in their November Wall Street Journal article, writers Chris Cox and Bill Archer explain the lack of knowledge about the unfunded liabilities as:

The actual liabilities of the federal government—including Social Security, Medicare, and federal employees’ future retirement benefits—already exceed $86.8 trillion, or 550% of GDP. For the year ending Dec. 31, 2011, the annual accrued expense of Medicare and Social Security was $7 trillion. Nothing like that figure is used in calculating the deficit. In reality, the reported budget deficit is less than one-fifth of the more accurate figure.

Why haven’t Americans heard about the titanic $86.8 trillion liability from these programs? One reason: The actual figures do not appear in black and white on any balance sheet.

To be sure, the nation’s fiscal problems are a bi-partisan issue, caused by years of buying votes among specific constituencies. As a result, those constituencies are now entitled to the benefits which have yet to be paid for.

Today, while those politicians wrestle with Obama’s self-induced sequestration deal, (which slashes defense spending while barely nibbling at the fat that has become the national budget), no one wants to deal with the real issue at hand: Politicians in Washington have enslaved future generations with the costs of various entitlement programs.

Perhaps it’s time we raise it to their attention–seriously.
___________________________
“Truth isn’t mean. It’s truth.”
Andrew Breitbart (1969-2012)

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COMMENTS

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  • clowngirl

    Excellent points!

  • Ghost of John Brown

    Some of us have been discussing this for years.

    http://www.youtube.com/watch?v=Rh2vzuJOH88

  • rbdwiggins

    The format is a somewhat “busy” but I really like the comprehensive nature of this Debt Clock.

    ‘Seriously’, is an understatement.

    Every time our $16.5 Trillion debt is mentioned in public, it should be immediately followed by: “… and our $123 Trillion in unfunded liabilities, which comes to more than $1 Million for each and every taxpayer in America…”

  • johnreagan

    The reason those debts are not mentioned is that they are all ‘pay as you go’, which has been the program since their inception..unlike our Defense budget, which just seems to grow and grow with little whining from anyone. About the only one mentioned in this article that is in the black of course is Social Security, which is separately funded and not part of the budget per se.

    As to the issue of anyone not caring about the deficit, of course they do. Most people think that handing over tax dollars so the CEO of JP Morgan can get his $23 Million bonus is plain wrong..and many of us recognized the problem with two unfunded wars, not to mention the disastrous Bush Jr tax cuts, both of which have brought us to this ugly state we’re in..Oddly, there wasn’t much breast beating when Congress approved them either. Go figure.

  • Kevin Groenhagen

    “and many of us recognized the problem with two unfunded wars, not to mention the disastrous Bush Jr tax cuts, both of which have brought us to this ugly state we’re in…”

    Let’s take a look at that claim. The wars and the tax cuts were all in place in FY 2007, which is the last budget passed by a GOP-controlled Congress and signed by Bush. We had a deficit of just $160 billion (and a primary budget surplus) that year. After Obama and the Democrats took over, we had our first trillion-dollar deficits. Obviously, this “ugly state” was not caused by tax cuts and wars. It was caused by the Democrats’ out-of-control spending.

  • DerKrieger

    If the federal government as embodied by the Marxist Left would allow us serfs to opt out of mandatory, coerced, forced “participation” in Obamacare, Social Security, and Medicare then unfunded liabilities could be drastically reduced.

    But there is no way the Marxist Left will set us free because we will be free of them and they can’t stomach not having subjects. They would prefer to take the country down.

  • http://www.alanjoelny.com alanjoelny

    I did a numbers breakdown analysis in December during the fiscal cliff discussions, but I only included Medicare and Social Security in the unfunded liabilities because they were the most recognizable (the rest rounding up to the 86 Trillion being a mismash of federal, military pensions, etc).
    It considers the government amounts in hard numbers than reduces the equivalents down to recognizable budget numbers , and the figures, like the ones above, are staggering in context. http://www.alanjoelny.com/government-spending-debt-and-the-fiscal-cliff-solutions-scaled-down-to-the-citizen-level/

  • joshinca

    The reason those debts are not mentioned is that they are all ‘pay as you go’, which has been the program since their inception..unlike our Defense budget
    Actually, you’ve got that completely backwards.
    Defense is pay as you go, every year funds must be appropriated for that function or else the spending levels fall to zero.
    Entitlements on the other hand, create classes of people that benefits will automatically go to, absent future contratry action, hence the name entitlements. Which is completely disconnected from the payments (of taxes) into the system by either individuals or the class a whole; hence the unfunded qualifier.

  • hnordquist_

    I would respectfully state that the spending is not a Democratic issue. The Republicans for all their talk have not cut spending, either. So, you cut taxes and raise spending and this is what happens. I’m not laying blame with either, but both sides here. Conservatives need to actually be conservative. If they simply slash revenue without following through on spending cuts, then, of what use are they?

  • Acton 27

    You asked a question. And there is an answer.

    We don’t talk about it because 70-80% of the American public do not have the capacity to understand two words: “present value.” When you say Social Security and Medicare, they think, “future expense.” They think, “Don’t want to be responsible for future expense.”

    The $123 trillion is not future expense, It is the amount we ow NOW if we were to set it aside, watch it grow at a regular interest rate, and pay out as the liabilities come due. (Is it the T-bill rate? I don’t know what these numbers are calculated with, although it is important).

    This is the principal of the mortgage. Maybe that’s the best way to explain it to people. The mortgage must be paid. We can’t pretend it doesn’t exist.

    If we talked about it in terms of present value, or as a mortgage, maybe we would be able to message better as a party. Oh wait, we’re Republicans, We don’t believe in communicating the hard messages because that would be mean,

  • Jack_Savage

    And the voters get blamed exactly when?

  • joehatfield37

    The reason that the DHS is buying 1.6 billion rounds of ammo is because they know that the nation is quickly unraveling…….they know that there’s no way in hell that the govt is going to be able to live up to the promises that were made, so they are getting ready for when it all hits the fan…

  • http://jameskbeard.com motorfingers

    If you look at what has been happening to the European governments forced into austerity to deal with their deficits, you have a hint why the Elephant in the Living Room has been ignored. The alarms first went up in the 1950′s. With the current partisan thinking and and a “brass ring” goal of permanently marginalizing the other party by both sides, we may be looking at a game of “it” for whoever is in office when the crisis is forced on us.

    Like any other building, foreseeable crisis, the entitlements bubble is going to get more difficult to deal with as time passes. When you see a crisis coming, you can deal with it and have some control over its effects or you can wait until you are reduced to reacting to the tsunami with little or no control. Early, we could have firewalled the Social Security from the general fund and made adjustments to contributions, benefits, eligibility age, etc. to make it sustainable with reasonable impact on future expectations. Fixing Social Security in 2013 seems insurmountable, and now we have Medicare too. Now, instead of looking at reforming these entitlements to make them sustainable, we have just initiated the biggest unsustainable entitlement of all, Obamacare.

    If we can’t even resist what is well-known up front as a new unsustainable bubble, where will we find the will to deal with the bubbles that are already costing us more than we can afford?

  • rbdwiggins

    When Moderates finally accept responsibility for the outcome each and every time their inability to stand on principle in lieu of public opinion empowers Progressives/Liberals/Democrats and the failed policies of the Left.

  • Seedyrom

    DC prints money then buys Treasuries and loans itself money, its like buying 20 Monopoly games, then thousands more games and pretending there is no debt owed! The DC game is real and other countries keep count, one day China and Saudis will stop buying our debt and the music stops. Who will have a seat in congress when the musical chairs game stops the music, they all will! So its up to us to pull as many dems and gop out of those seats to start induing the damage.

    Problem is, they have Karl Rove and dozens of others on the right and left who front run with a gamut of games. The left has a smear machine and complicit media, tackle the media by pursuing jobs in the media and use the EEOC to push harder when they deny a job. Plan B, continue building media coalitions online and drive their business down!