US Govt Underfunded by 84 Trillion Dollars

[Chase]

Such is the claim in hour 3A of this week's Financial Sense Newshour. Always a great show, I highly recommend it.

(This discussion starts around 14:35 in. The figure comes from adding the entitlement gap to the hard and soft government guarantees)

edit: Link fixed, sorry

 

[Zippyjuan]

Link not working for me.
Often those "unfunded government liability" calculations figure things like Social Security payments for the next 50 years with no tax revenues coming in to pay for them. I was curious to find out how they are coming up with their numbers. It is the amount you need to come up with today to pay for all the promises made for expenses in the future. But as I said, that ignores future incomes for the government like taxes. You do not need to fund every year of social security benefits right now- at this moment. You need to be able to fund them when they are due. Retirees are not getting a lump sum payment of all of their retirement benefits- they are spread out over the remainder of their lifetimes- however long that may be.

If you buy a house for $200,000, is it reasonable to say that you now have an unfunded liablity of $200,000? Do you have to come up with the money to pay for it right now (oops- I am $199,000 short today!)? No, you have time to pay it off. that was the terms that you bought the house under. Things like Social Security and Medicare do not have to have the money on hand right now to pay for the next 50 years of benefits.

The number $84 trillion is not a very meaningful one. Yes we do need to get spending down. Absolutely. To say that we are short by $84 trillion is untrue.

 

[IPSecure]

Extra http in link above...
http://www.financialsense.com/fsn/main.html

 

[Objectivist]

Such is the claim in hour 3A of this week's Financial Sense Newshour. Always a great show, I highly recommend it.

(This discussion starts around 14:35 in. The figure comes from adding the entitlement gap to the hard and soft government guarantees)

edit: Link fixed, sorry

The term I believe is "unfunded mandates" or "unfunded liabilities". Check out the movie I.O.U.S.A.

 

[Objectivist]

David Walker was the US Comptroller and he's been saying this for some time, here's the trailer.
YouTube - I.O.U.S.A. Movie Trailer