The true national debt (How big is it really?)

Washington Post ^ | 02/25/2013 | Robert Samuelson

[SeekAndFind]

How big is the national debt?

You’d think this would be an easy question. Surely we know how much the government owes. Unfortunately, it’s not that simple. The true national debt could be triple the conventional estimate, anywhere from $11 trillion to $31 trillion by my reckoning. The differences mostly reflect explicit and implicit “off-budget” federal loan guarantees. In another economic downturn, these could result in large losses that would be brought “on budget” and worsen already huge deficits. That’s the danger.

My purpose is not to scare or sensationalize. It’s simply to illuminate the problem. Broadly conceived, the national debt covers all debts for which the federal government assumes final responsibility. For politicians, the appeal of “off-budget” programs is that they allow the pleasure of spending without the pain of taxing. But they also create massive exposure for government.

Let’s see why. Below are five estimates of the national debt. I compare each with our national income (gross domestic product), which is the economic base to service debts. In fiscal 2012, GDP was $15.5 trillion. Some economists say a debt ratio exceeding 90 percent slows economic growth. The United States already exceeds this threshold on four of my five measures.

[Red Badger]

Depends on the definition of ‘I$’..........

[P.O.E.]

Sad, isn’t it, that I now guffaw when I hear “backed by the full faith and credit of the United States”.

As Gertrude Stein might say, “There is no “there” there”.

[C210N]

The true national debt could be triple the conventional estimate, anywhere from $11 trillion to $31 trillion by my reckoning...

The usual drivel from the compost trying to minimize a disaster by saying "could be triple" and giving triple numbers when it should be saying "IS TENFOLD!" and giving numbers ten times the size.

Omitted here is mention of SS, mediscare and mediscaid, with additional unfunded liabilities reaching to upwards of $100 Trillions.

[Zakeet]

In true Libtard fashion, Samuelson's estimate of government solvency omits:

• Unfunded future government obligations (e.g. Social Security, Medicare, Medicaid, Veterans Benefits, Civil Service Pensions, Retired Military Pensions, etc.) -- usually not included because Congress "can always end the program" -- estimated by the GAO to be over $60 trillion using GAAP accounting -- estimated by others to be in the range of $100-150 trillion using more realistic premises (e.g. the economy and tax receipts aren't going to grow by 8 percent p.a. over the next 50 years).

• Fed held Treasury obligations -- somewhere in the neighborhood of 2.5-3.5 trillion -- and increasing rapidly.

• Other Fed bank bailouts -- somewhere north of 20 trillion according to last year's testimony by the Great Bernack to Ron Paul's house committee.

• Unfunded state and local obligations -- shouldn't forget them -- somewhere in the neighborhood of 20-50 trillion.

• "Obligations" to foreign banks and governments incurred by the Fed and/or Bank of International Settlements and/or International Monetary Fund -- somewhere north of 30-50 trillion.

• Shadow banking guarantees -- the largest being derivatives -- somewhere in excess of 1.3 quadrillion (that's 1,300 trillion for those who haven't yet caught on to the magnitude of big numbers used in high finance these days) -- not really due unless you want to cause a systemic failure and crash the economy by not bailing out the big banks.

You don't need to worry though. Professor Paul Krugman, the Nobel Prize winner and New York Times columnist, a devoted Keynesian economist, maintains from his ivory tower that we can recover fully with still more government spending. The Bernack himself said that he is 100 percent sure that inflation can be contained. And we still have about 8,000 tons of gold in the vault ... somewhere ... probably!

[The_Reader_David]

And, it’s even worse than what your correction suggests: this is only the Federal debt you’ve corrected from the liberals’ rosy estimates. Were the U.S. a unitary state, as many nations are (and the left wishes the U.S. were), there would also be all the indebtedness and unfunded pension obligations of all state and local governments to include in the national debt — and the fact that we still have the remains of the Founders’ federalist vision does not mean the economic impact of debts and unfunded pension obligations are any less simply because they were created by the legislatures of on of the several states or a municipality, rather than by Congress, so such inclusion is appropriate for a proper analysis of the state of our nation and our economy..

[The_Reader_David]

Sorry, I didn’t read carefully: you did include unfunded local and state obligations, so it’s only actually issued bonds from the several states that you might have missed — but that’s probably rounding error after what you correctly included.

[TomasUSMC]

How do we normal folks get some of that 85B being printed monthly?