Unchecked Government Marches On, II
By Arnold Kling
USA Today reports,
Taxpayers are on the hook for a record $57.3 trillion in federal liabilities to cover the lifetime benefits of everyone eligible for Medicare, Social Security and other government programs, a USA TODAY analysis found. That’s nearly $500,000 per household.
When obligations of state and local governments are added, the total rises to $61.7 trillion, or $531,472 per household. That is more than four times what Americans owe in personal debt such as mortgages.
The $2.5 trillion in federal liabilities [added last year] dwarfs the $162 billion the government officially announced as last year’s deficit, down from $248 billion a year earlier.
…The reason for the discrepancy: Accounting standards require corporations and state governments to count new financial obligations, even if the payments will be made later. The federal government doesn’t follow that rule. Instead of counting lifetime benefits for programs such as Social Security, the government counts the cost of benefits for the current year.
The newspaper calculates that last year the government added $1.2 trillion in future Medicare liabilities and $0.9 trillion in new Social Security liabilities. Again, a private sector company would not be allowed to do this without reporting it and without taking steps to fund such liabilities.
But the government is the solution to the private sector “debt crisis.”