Chris Cox and Bill Archer have written an unsettling piece for the Wall Street Journal
about the sobering reality of the US Debt. Though some may be familiar
with the $16 trillion figure, there are few who realize that this is
actually just the tip of the iceberg. According to the article, the true
number is actually closer to $86 trillion (which amounts to 550% of our
GDP). Cox and Archer argue that the government has gotten away with
underestimating the actual price of our national debt since
it has not needed to furnish the kind of financial documentation
required of most businesses. “The actual figures,” they write, “do not
appear in black and white on any balance sheet.” While the U.S. Treasury
“does list liabilities such as Treasury debt issued to the public,
federal employee pensions, and post-retirement health benefits…it does
not include the unfunded liabilities of Medicare, Social Security and
other outsized and very real obligations.”
The problem is that all the revenue collected for these particular
entitlement programs is not actually being saved for the future, but is
being paid out to current retirees. And this will all fall apart when
more and more of our nation’s baby boomers start collecting retirement
benefits. The government is currently borrowing 1 out of every 3 dollars
that it spends, so what will we do when the majority of the boomers are
retired?
According to the authors, “Borrowing at this scale could
eclipse the capacity of global capital markets–and bankrupt not only the
programs themselves but the entire federal government.” Continue at Shane Rosenthal
