Free Republic
Browse · Search
News/Activism
Topics · Post Article

Skip to comments.

Cox and Archer: Why $16 Trillion Only Hints at the True U.S. Debt
Wall Street Journal ^ | November 26, 2012, 6:41 p.m. ET | By CHRIS COX AND BILL ARCHER

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 sheet—if 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 ...


TOPICS: Business/Economy; Culture/Society; Editorial; Government; News/Current Events
KEYWORDS: bankrupt; broke; debt; deficit; entitlements; spending
Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-72 last
To: central_va
And just in case some knucklehead decides to to resurrect this thread somewhere down the road. From your link:

Unemployed Americans have collected $319 billion in jobless benefits over the past three years.... [emphasis added]

I know, I know . . . basic math and economics and all that.
61 posted on 11/27/2012 5:56:40 PM PST by 1rudeboy
[ Post Reply | Private Reply | To 52 | View Replies]

To: 1rudeboy

Lets talk about the dollar collapsing. You think it won’t. Right?


62 posted on 11/27/2012 5:59:23 PM PST by central_va ( I won't be reconstructed and I do not give a damn.)
[ Post Reply | Private Reply | To 61 | View Replies]

To: pepsionice

It may (or may not) be untouchable now.

I say it’s not, but then again I’m pretty much a solid minority right now.

That said, I shall continue this point because I cannot do anything else right now.

:)


63 posted on 11/27/2012 6:41:05 PM PST by Cringing Negativism Network
[ Post Reply | Private Reply | To 44 | View Replies]

To: SeekAndFind
Are you using an actuarily sound figure or is that a number derived from doing present value analysis?

You do know PV works well only to compare and contrast the outcomes from two different proposals ~ e.g. to build a new building or to fix the old one.

It ties in well with the math used to determine a Return on investment (ROI).

However, the numbers themselves are a fiction.

That dollar on deposit at Barclays really won't be worth $6 trillion in 5,000 years when you pop out of your time machine ~ failure to 'churn' (there are lots of names for it) is usually punishable through termination of your account.

64 posted on 11/28/2012 11:19:05 AM PST by muawiyah
[ Post Reply | Private Reply | To 1 | View Replies]

To: muawiyah

So, if instead of using PV value calculations, we use “actuaraily sound figures”, is America’s debt and future obligations situation better or worse?


65 posted on 11/28/2012 11:24:11 AM PST by SeekAndFind
[ Post Reply | Private Reply | To 64 | View Replies]

To: EternalVigilance
Technically the Social Security payments are BORROWED from the Social Security accounts ~

Best bet on maintaining that system is to help the economy create more jobs. I was thinking of using our military power to sorta' coerce other countries to pay us tribute, or accept occupation. That right there would create a need for a colonial bureaucracy sufficient to the task.

We haven't had a big ol' Empire on this planet for quite some time ~ and we need the money eh!

66 posted on 11/28/2012 11:24:40 AM PST by muawiyah
[ Post Reply | Private Reply | To 48 | View Replies]

To: central_va
We are still in a deflationary cycle, and due to further extensions of mechanization, automation, computerization, robotics and improved work methods we are going to be there for the foreseeable future.

We probably need to monetize our national patrimony (property owned by the federal government) and begin paying domestic debts with that currency.

67 posted on 11/28/2012 11:27:00 AM PST by muawiyah
[ Post Reply | Private Reply | To 60 | View Replies]

To: SeekAndFind
When it comes to figuring out how much the federal employee retiree obligations are, and how much of that has already been paid for by retiree deposits in previous years, we need several actuaries, and some personal information we don't have about federal employees or federal retirees.

I've done it for myself and the way it works out, under the worst expected situation (8% inflation and 8% interest rates), I'd have to live to be 200 years to reach a point where the federal government had actually had to fork over a single penny for my retirement.

It takes at least 3 actuaries to arrive at a consenses regarding the probability of an individual today living to be 200 years of age.

With lower rates of inflation and interest, it's still pretty much the same thing.

Someone might use Present Value Analysis to compare one retirement system to another.

68 posted on 11/28/2012 11:32:51 AM PST by muawiyah
[ Post Reply | Private Reply | To 65 | View Replies]

To: muawiyah

Borrowed? LOL...

I’m pretty sure that’s called cooking the books.


69 posted on 11/28/2012 11:52:22 AM PST by EternalVigilance (America's creed: Our rights come from God, not men. Governments exist to secure those rights.)
[ Post Reply | Private Reply | To 66 | View Replies]

To: EternalVigilance
Uncle Sam can do what it wishes to account for gub'mnt money. There are several different accounts ~ Social Security is one, there's the General Fund, USPS runs a separate set ~ it's not cooking the books any more than large multi-national firm might well have different accounts for its various divisions.

The way they do an interfund transfer is pretty simple with Social Security ~ they borrow it. With USPS they simply demand bakshish of $5 billion each year. And so on.

The problem the Democrats have is they set this system up and they're the ones who referred to the intrafund transfers as LOANS ~ which create DEBTS ~ and that's the 14th amendment and the Contracts clause that have to be satisfied whenever they do something.

The Democrats never imagined the Republicans would hold the House of Representatives ~ not in their wildest dreams.

At some point here they have to tell Obamugabe the truth

70 posted on 11/28/2012 12:34:24 PM PST by muawiyah
[ Post Reply | Private Reply | To 69 | View Replies]

To: muawiyah

At some point someone has to tell the American people the truth.


71 posted on 11/28/2012 4:26:42 PM PST by EternalVigilance (America's creed: Our rights come from God, not men. Governments exist to secure those rights.)
[ Post Reply | Private Reply | To 70 | View Replies]

To: Cringing Negativism Network
Our new materialistic American culture likes lot's of cheap sh ...well, you know.

I know, let's send the SEIU, AFLCIO, UAW, other union protesters to China and tell them to put their mouth where the money is...and demand higher wages for Chinese workers as a "balanced approach" to free trade.

72 posted on 11/28/2012 4:42:05 PM PST by RckyRaCoCo (I prefer liberty with danger to peace with slavery, IXNAY THE TSA!)
[ Post Reply | Private Reply | To 2 | View Replies]


Navigation: use the links below to view more comments.
first previous 1-2021-4041-6061-72 last

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.

Free Republic
Browse · Search
News/Activism
Topics · Post Article

FreeRepublic, LLC, PO BOX 9771, FRESNO, CA 93794
FreeRepublic.com is powered by software copyright 2000-2008 John Robinson