“Sorry, that’s a load of B.S. They are probably counting cumulative Social Security and Medicare payments to be made over the next 100 years …”
Yes, that does count Social Security and Medicare, and it is correct to do so (and dishonest not to). Here’s why:
Let’s say you are 35 years old and you purchase from the government a 30 year treasury for $1000. When you reach 65, the government has an obligation to pay you back the $1000. The way the government reports things today is that the $1000 cash you paid is “revenue”, and the future obligation to pay back $1000 is a “liability”. That $1000 liability gets added to the national debt, and reported as part of the nearly $10 trillion that the government must pay in the future. Makes sense, right?
Let’s say you are still 35 years old and the government withholds $1000 from your paycheck for social security. When you reach 65, the government has an obligation to pay you back the $1000 in the form of social security benefits. The way the government reports things today, the $1000 you pay today is revenue, but the $1000 future obligation is not reported as a liability. That $1000 is not added to the national debt. Does this make sense? No, it is completely dishonest. Arguably, it’s a form of accounting fraud a la Enron. The funny thing is, this shadowstats guy gets his GAAP prepared balance sheet from Bush’s treasury department. So really, it isn’t complete fraud because they are reporting this ugly fact, they are just saying “pay no attention to the man behind the curtain” and pushing the dishonest number as the preferred measure.
And the next 100 years? I have bad news for you. A large portion of this is owed to baby boomers, the first of whom turn 65 in 2010. These unfunded obligations are “maturing” very soon.
And finally, let’s not stray from the point. It is not evil for the government to offer care for retirees if it can legitimately provide it. However, it is evil to make promises it can’t keep, understate its obligations to promote misplaced confidence, and debase the currency to effectively default on its obligations. That’s the real point here.
