Every American knows that the debt Uncle Sam has racked up is mindboggling. A single visit to the website USDebtClock.org, a website that shows real time economic statistics for the United States, shows this well enough. As of the 7th of July 2019 the figures do indeed look grim. The federal government owes $22.523 ($22,523,000,000,000) trillion dollars which would figure out to $68,387 per citizen and $183,031 per taxpayer. Note, the website has a feature called “the debt clock time machine” where it predictably states what figures looked like in the past or what they estimate they will look like in the future. Incidentally, by 2023 the national debt is projected to be $29.908 ($29,908,000,000,000) trillion, $87,274 per citizen and $224,663 per taxpayer.
Those figures do not bode well for our economic future at all but that does not even tell half of the story. Back in good old 2019 at the bottom of the page rests much scarier numbers. As one could infer from the title of this article, they are the unfunded liabilities. Simply put, an unfunded liability is mandatory government spending on programs such as social security and Medicare that are just that, unfunded. The money is not there to give out. Eventually, the welfare coffers will run dry and severe changes will need to be made. Such shocking changes as will inevitably be inflicted by the collapse of the welfare state aside, the real problem are how it relates to the national debt. Some of these liabilities must be paid out each year (social security for today’s retirees) and if the money is not there to pay that out it must be acquired somehow. This can be done through raising taxes to increase revenue, borrowing or printing more money. However it is done, there are negative economic effects. Raising taxes has a self-evidently negative effect. Borrowing makes the problem worse and increases the cost to service the debt. Creating more money runs the risk of inflation which reduces the value of all money and drains savings.
With the inherent dangers of unfunded liabilities in mind, now their size can be appreciated. The debt clock places the total at $125.015 trillion ($125,015,000,000,000) at this time. Social Security stands at a cool $19.895 trillion ($19,895,000,000,000) and Medicare at $30.680 trillion ($30,680,000,000,000). Before panic sets in, not everyone agrees that these numbers are accurate. Some think the number should be far higher. Forbes recently claimed that the total amount of unfunded liabilities is actually an incomprehensible $210 trillion ($210,000,000,000,000). Keep in mind that at this moment, democrats running for the presidency in 2020 are pitching programs like Medicare for all, universal healthcare, universal basic income and other prohibitively expensive programs. Just because they are just that, prohibitively expensive won’t stop the left from implementing them if given half a chance. Any grandiose program like those proposed by the socialists would astronomically increase not only the debt but the unfunded liabilities.
One would imagine that every news outlet in America would be sounding the alarm about financial commitments like this. After all, anyone watching the news is bombarded with rhetoric about the national debt but there are almost never any words spoken on this subtopic of it. Indeed, searching the internet for articles on this topic reveals only a few articles –the Forbes article sourced above and a stray Real Clear Politics editorial. The silence is deafening from the media on a critical issue that has the possibility of blowing apart the American economic system. If real solutions are to be advanced, attention must be paid to it by both the media and the American people at large.
Photo credit: Screenshot of USDebtClock.org
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