Yep, our elected officials have really run up $1,028,000 of public obligations for the family of the average American. No kidding.
First there’s the hard debt – contractual obligations of the government. Roughly $87,000 per family – half the value of the average home in America. It’s chicken feed to America’s politicians.
Then there’s the semi-hard debt – primarily retirement benefits for civil servants that their governmental employers have not saved. That’s almost as much, $73,000 per family. Think taxpayers can wrest control of that money from unions? It’ll be a whale of a fight.
Then there are the best loved brands in government: Social Security and Medicare. They are slated to consume $368,000 per family more than tax revenues over the next 75 years. Beyond 75 years, those two programs are short another $500,000 per family. (The Treasury, Social Security and Medicare Trustees Reports, GAO, and Census Bureau have additional details if you’re interested.)
To put in perspective, it would take $1,028,000 per family invested today and growing to pay off government’s debts, promises, and implied promises: federal, state and local, as they come due.
This is in addition to the taxes citizens already pay.
Every year the balance is not paid down, it grows at the rate of interest – like an unpaid mortgage.
This analysis makes the heroic assumption that taxpayers will not be called upon to make good on any loans that they have co-signed. No FDIC problems, no bad TARP money, no further Fannie and Freddie losses, no student loan troubles, etc…
In the interests of credibility, it is imporant not to exaggerate the problem. America can cut the total unfunded liability in half easily – simply by deciding the country is not going to pay Social Security and Medicare to anyone roughly 8 years old or less or to those not yet born. Simple, right? Not in a political environment…might not even be possible.
Visit MyGovSpending.com/beginner/new (full disclosure: it is my site) for a view of your families’ total tax bill, share of government spending, your share of the deficit and the national debt. I think you should know.
The numbers are big. There’s not much time.