We all know that the federal government has “hit” the debt ceiling of $14.294 trillion that Congress has authorized. So, Congress is now looking at “where we go” from here. But, here is what you may not know.
The federal government doesn’t have to play by the same accounting rules as does any publicly traded company. For a corporation, any future liabilities, such as future pension and health care costs promised to employees, must be listed on the company’s balance sheet. Those items can be ignored by the federal government as, under their rules, nothing is recorded until the federal government writes a check.
According to a study done by USA Today, “what you don’t know” is far more troubling than “what you do know”. We currently owe an additional $61.6 trillion to pay for future “promises” we have made, and have absolutely nothing “in the bank” to pay for that.
Our future unfunded obligations to Medicare…$24.8 trillion…to Social Security $21.4 trillion…to federal debt…$9.4 trillion…to retired military $3.6 trillion, and the list goes on.
Believe it or not,
The government has promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund’s key asset: federal IOUs. [emphasis supplied]
The total for all unfunded liabilities amounts to $534,000 per American household.
We have over promised, and over spent, adding an additional $1.5 trillion in new “recognized” debt last year alone. Meanwhile, I for one, get the sense that our president is unconcerned about this. Rather than taking the lead, as presidents usually do, he is, once again “leading from behind” and hoping Congress can figure something out.
That is the real tragedy.