President Obama and the Treasury Department are demanding that Congress raise the $16.7 trillion debt ceiling so that the government can continue borrowing in order to pay its current obligations before the October 17 deadline. However, and known to far too few citizens, $16.7 trillion is a fraction of the total national debt owed by our government. Missing from the discussion about raising the limit on the government’s credit card are trillions in unfunded liabilities that the United States of America simply will not ever be able to pay.
What exactly are unfunded liabilities? They are payments the government knows it owes in the future, including the future costs of Medicare, Social Security, and the prescription drugs of Medicare Part D. You can follow the unfunded liabilities tab on the U.S. Debt Clock website — right now, this site estimates our unfunded liabilities to be $125.7 trillion. In 2017, if current trends continue, the site’s “Debt Clock Time Machine” estimates unfunded liabilities will reach $153 trillion.
Amazing as it seems (and no private firm would ever contemplate such deceitful accounting), these trillions in unfunded liabilities are not itemized on the current U.S. Treasury balance sheet. However, due to a demographic bulge comprising 28% of the total U.S. population now reaching retirement, these mounting “unfunded” obligations can no longer be ignored. The first crop of post-war children from 1946 began turning 65 in 2011 at the rate of 10,000 a day. This pace will continue until 2029, when the last group of boomers born in 1964 turn 65.
Our government will struggle to generate enough tax revenue to pay for what is owed and promised, but 76 million rapidly aging baby boomers overwhelm the number of younger workers paying into the system. Eventually, between the interest on the debt and the benefit payments themselves, there will be no money left in the federal budget for anything else.
Here is what the Congressional Budget Office (CBO) wrote in its 2013 Long-Term Budget Outlook report released on September 17:
Choices For The Future
The unsustainable nature of the federal government’s current tax and spending policies presents lawmakers and the public with difficult choices. Unless substantial changes are made to the major health care programs and Social Security, those programs will absorb a much larger share of the economy’s total output in the future than they have in the past.
Yet the phrase “unsustainable nature” isn’t heard often from our current administration and media. This climate could lead to our national “demise” because Medicare, Medicare Part D, and Social Security are not going to change. Whenever there is talk of reforming these programs, a national outcry follows.