U.S. Funding for Future Promises Lags by Trillions
June 7th, 2011Via: USA Today:
The federal government’s financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA TODAY analysis shows.
The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings to a record $61.6 trillion the total of financial promises not paid for.
This gap between spending commitments and revenue last year equals more than one-third of the nation’s gross domestic product.
Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit prompting heated debate between Congress and the White House over lifting the debt ceiling.
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Corporations would be required to count these new liabilities when they are taken on — and report a big loss to shareholders. Unlike businesses, however, Congress postpones recording spending commitments until it writes a check.
The $61.6 trillion in unfunded obligations amounts to $534,000 per household. That’s more than five times what Americans have borrowed for everything else — mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.
$534,000 for every household really brings it home.
Makes that hard-won nest egg look….somewhat less worthwhile.
I feel like a working person married to a compulsive gambler.
I wish reports like this would make a difference in public opinion (and action), but I do not expect anything to happen. At this point I cannot imagine any positive future for the US that does not involve some very dark days economically first.
Zeke.