Posted on 08/14/2013 5:50:05 PM PDT by whitedog57
The Federal government debt outstanding is almost $17 trillion.
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And that is the GOOD news! According to economist James Hamilton at University of California at San Diego, the value of notional off-balance sheet liabilities was around $70 trillion in 2012.
We were already aware that unfunded liabilities are staggering, according to USDebtclock.org.
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The biggest items in this category come, of course, from Social Security and Medicare. If current policies are maintained, these off-balance sheet liabilities will require enormous sacrifices from future taxpayers. Better know as massive increase in taxes.
Hamiton includes the implicit mortgage guarantees of Fannie Mae and Freddie Mac: ”With the federal government today being the sole owner of Fannie and Freddie, it seems appropriate to consider both the direct debt obligations … as well as their outstanding mortgage guarantees [which are now treated] as an off-balance sheet liability.” Added together, housing guarantees ($7.5 trillion), FDIC guarantees ($7.4 trillion), Social Security ($26.5 trillion), Medicare ($27.6 trillion), and other government trust fund liabilities ($1.8 trillion) come to $70 trillion. That’s an increase of $13.5 trillion just since 2006, and is growing by more than $2 trillion a year.
So as we discuss housing finance reform, the cost of housing-related guarantees and subsidies are a deal breaker and need to be scaled back. That is why Corker-Warner is less desirable than the House’s PATH Act.
Well, no they won't be required, because the future generations will refuse to pay them. There will be civil unrest far before an entire generation will be put under indentured servitde.
Sadly I think you are right. There will be unrest and these unfunded liabilities will never be paid. Someone, most likely the elderly, will be shortchanged of promised Social Security and Medicare benefits.
Or, in the worst case,we could have a full blown revolution, and repudiation of all debts or liabilities by the former government.
We could also see runaway inflation, where debts get paid in worthless dollars.
But, something’s got to give. Liberals talk of sustainability in the carbon area. What about debt sustainability?
Now add in state and local government debts. CA, NY, Detroit et all. None of them can print money as a short term fix.. All of them will demand a federal handout. There isn’t enough currency in the world to cover the gov’t debts. Nice.
Yes, and it is unfortunate. There are a lot of bus drivers and teachers who are going to get a lesson in unsustainable promises, and anyone else with a pension. And I have a lot of sympathy for them. They accepted employment on terms of a pension, and expect to get it. They were acting in good faith.
But the various agencies and governments who hired these public employees, and elected leaders who promised all these benefits, knew full well that they were promising more than they could deliver. They knew because each government has accountants and actuaries whose sole job is to calculate out these obligations and make sure there is money available when it is needed. They have superior knowledge in all these labor agreements and hiring contracts that they couldn't deliver, but they promised anyway, and took these employee's labor for decades under false pretenses.
Never, ever, think that governments did not know what was going to happen. They knew. I can even remember "60 Minutes" type TV programs 20-30 years ago, interviewing city actuaries about all of these unsustainable benefits they were offering. Their answer was, "if we don't offer them, then next city will, and we want the best people. By the time they retire, I'll be gone". They knew this was unsustainable. It has all been a 20-30 year long lie told to their employees.
Both the young, and the elderly, need to be on the same side and understand who the true villains are. It is the government at all levels, unions, and anyone who promised the moon, and obligated someone else to pay.
Social Security has been a boondoggle from the beginning..
Planned liability creep... like with any givernment program..
It’s not LIKE it was not all forecast-ed either...
Democrats planned to raid the Trust fund from the beginning.. and did..
Republicans acquiesced like Dorothy on the way to OZ...
The game was over when Barry Goldwater was not elected..
It became JUST a matter of time...
TIMES UP!!!!.
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