He does need to break this down.
He claims to have netted future tax receipts, but doesn’t mention interest income which gets compounded.
We need to see his assumptions. At what age does he assume people are retiring, and how old do they live.
What’s the liability for those already retired where we aren’t getting additional funds.
What’s the liability for those still working, where we are getting funds and there is time for those funds to grow.
I agree that we need to be looking at the unfunded liability. But we need to be looking at the cost vs projected income.
We probably need to split out Medicaid too. Unlike SSA and Medicare, Care for the indigent is a normal responsibility of a government. So that piece is sort of like saying I spend $15 a day on food, and since I expect to live to be 80. I owe $175,000 for my future food expenses.
SSA, Disability Insurance, Survivor’s insurance, and Medicare should all be treated as separate agencies with their own trust fund. And should be managed and regulated like an insurance company.
He also needs to figure in the $2.5 Trillion that is owed SS. They seem to forget that small fact. They should also figure in the idea of not letting the government borrow future SS funds to use in the general fund. If they did that, where would they stand?
“He does need to break this down.”
He’s using official government figures for SS and Medicare which assumes “present law” i.e., no further changes in retirement age beyond those that were included in the 1983 Reagan agreement. SS actuaries also project life expectancy based on changes in death rates using a pretty sophisticated model.
See the bottom boxes here:
http://www.usdebtclock.org/
They show that combined unfunded liabilities just for Medicare and SS are $115T. Kotlikoff adds to this total U.S. debt (not just the “public” portion) of $14.7T and I think he also includes total personal debt of $16T (on grounds that those on the hook for the latter by definition have $16T less resources with which to handle the former). He also includes all state/local debt plus unfunded pension/health liabilities for retirees, which I think is probably another $5T or so.
I believe the remaining $61T is the result of rolling in the interest required to bankroll all the borrowing we have to do because revenues don’t match expenditures and also projecting the estimated 2085 fiscal gap for “everything else” into perpetuity.
The point is that the single greatest share is due to entitlements since they account for $115T directly and also are responsible for a good chunk of the tens of billions of interest payments rolled into his figures. Solving our fiscal problem without solving entitlements is literally impossible.
What “interest income”?