Skip to comments.Cox and Archer: Why $16 Trillion Only Hints at the True U.S. Debt
Posted on 11/27/2012 7:08:58 AM PST by SeekAndFind
A decade and a half ago, both of us served on President Clinton's Bipartisan Commission on Entitlement and Tax Reform, the forerunner to President Obama's recent National Commission on Fiscal Responsibility and Reform. In 1994 we predicted that, unless something was done to control runaway entitlement spending, Medicare and Social Security would eventually go bankrupt or confront severe benefit cuts.
Eighteen years later, nothing has been done. Why? The usual reason is that entitlement reform is the third rail of American politics. That explanation presupposes voter demand for entitlements at any cost, even if it means bankrupting the nation.
A better explanation is that the full extent of the problem has remained hidden from policy makers and the public because of less than transparent government financial statements. How else could responsible officials claim that Medicare and Social Security have the resources they need to fulfill their commitments for years to come?
As Washington wrestles with the roughly $600 billion "fiscal cliff" and the 2013 budget, the far greater fiscal challenge of the U.S. government's unfunded pension and health-care liabilities remains offstage. The truly important figures would appear on the federal balance sheetif the government prepared an accurate one.
But it hasn't. For years, the government has gotten by without having to produce the kind of financial statements that are required of most significant for-profit and nonprofit enterprises. The U.S. Treasury "balance sheet" does list liabilities such as Treasury debt issued to the public, federal employee pensions, and post-retirement health benefits. But it does not include the unfunded liabilities of Medicare, Social Security and other outsized and very real obligations.
(Excerpt) Read more at online.wsj.com ...
We most often hear about the alarming $15.96 trillion national debt (more than 100% of GDP), and the 2012 budget deficit of $1.1 trillion (6.97% of GDP). As dangerous as those numbers are, they do not begin to tell the story of the federal government's true liabilities.
The actual liabilities of the federal governmentincluding Social Security, Medicare, and federal employees' future retirement benefitsalready 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.
TO MAKE A LONG STORY SHORT --- WE'RE ACTUALLY BANKRUPT. WE JUST WON'T FACE THE FACT.
Bring back US jobs to America.
RE: Bring back US jobs to America.
Easy to make slogans. HOW do you do it?
It is truly a shame that the Republicans had all three branches of government and did not address these problems. I know that President Bush did address Social Secuirty reform but I don’t believe that was during the time we had all three part of government. Plus Bush backed off because a few democrats said “boo”.
Just putting it out there.
I have my ideas, but I prefer not to get bogged down in them until we get a consensus first.
Federal Financial Stewardship File.
The media keeps saying fiscal cliff. We are down the river without a paddle thanks to the media.
And we need lower gasoline prices. But jobs and gasoline have no bearing on the fact that the government spends too much money.
We might as well be complaining about sunspots....
Americans spend too much on imports.
It’s currently a wash.
Americans spending too much money on imports has nothing to do with the government spending too much money, period. And until we can start talking about government spending without throwing-around red herrings, nothing will be accomplished.
GWB was right on SSI and Fannie and Freddie and 2 exit ramps were passed, read my tagline...
I thought that was your point. Let me reply please:
We need to stop buying so many imports.
Billions and billions worth. Meanwhile the government needs to stop spending billions and billions on everything.
But the two are completely related.
Our side is trying to be perceived as responsible. Yet we do nothing as US manufacturing heads ever, and ever more overseas.
What does this do?
When a budget is being discussed the GOP says we are spending too much, what is the public supposed to think?
The public (at least some of the public) is not perceptive like you. The public sees US corporations constantly shipping more and more jobs overseas - and thinks two things:
Now there is some truth in that.
We must start to take the position advocating for American jobs.
Don’t you understand? Big numbers just confuse the Stoooopid American voter. Recently, custody of an Argentinian warship was transferred to a debtor when it came into a foreign port. That happening to us would suit the Dems just fine as long as “entitlement” payments went out as usual.
Not by raising corp taxes more and more.
I expect many companies to issue their dividends early this year—in Dec, so they will be taxes at the curent rate instead of the rate next year. I would if I were in charge.
That's why tossing around bumper-sticker slogans is pointless. Unless it makes you feel like you've accomplished something.
The two are completely related. And the GOP has taken the wrong side. For too long.
This last election, this has hit equilibrium in terms of voters. May have moved a bit in the Democrat position, or (as I suspect) Mormons are just too ... “whatever” to win a national election.
Whichever is the reason, the fix is obvious:
Bring back US jobs. Now.
There is no more time to wait.
Related in the same way that, in a discussion of why a particular baseball team needs a solid starting rotation in order to succeed, you insist that it needs more hitters.