The fiscal state of the U.S. generally focuses on the $1 trillion budget deficit and the $16 trillion national debt. But this number doesn’t take into consideration the unfunded liabilities of Social Security, Medicare and Medicaid.
The above graph, compiled by Veronique De Rugy of the Mercatus Center at George Mason University, offers a snapshot into what the real U.S. debt situation might look like.
Keep in mind that “this money is not due in the future; it’s like a credit card bill the country owes right now. If we don’t pay interest on it, the debt will continue to accumulate. Addressing our unfunded liabilities problem requires fundamental entitlement reform and reductions in federal spending,” according to De Rugy.
Some other main takeaways, according to De Rugy, include:
- “Former chairman of the SEC Chris Cox and former chairman of the House Ways & Means Committee Bill Archer (2012) report roughly $87 trillion in unfunded liabilities using data from the Medicare and Social Security Trustees’ Reports. Their measures account for the unfunded liabilities—including Social Security, Medicare, federal workers’ pensions—in addition to the official debt.
- Boston University economist Laurence Kotlikoff calculates a “fiscal gap” amount of $222 trillion using the Congressional Budget Office’s alternative long-term budget forecast. The fiscal gap measure takes into consideration the present value of all the expenditures now through the end of time (including servicing the official debt) and subtracts all the projected taxes from that amount.
- Both alternative debt figures dwarf the $16 trillion official debt figure, even when you add the $55 trillion Treasury estimate for unfunded liabilities to total $71 trillion.”