National Debt 2: Electric Boogaloo
Posted by Ryne McClaren on March 7, 2010
To keep a theme going, I want to reference something that Abe said in his post, something Very Important:
One big problem for enlightened debate about spending is the difficulty we all have in comprehending the magnitude of the numbers involved. We can all get outraged about millions of dollars for bonuses to Goldman Sachs employees without realizing how miniscule those are compared to the real problems we are facing.
It is hard to get your head around, and Abe — being quite the astute taxpayer — helped out.
But as an addendum I don’t think that it’s possible to really put both arms around a trillion here and a trillion there until we ask that age old question, “What does it mean to me?” It’s a simple question, honestly, but it’s seldom asked by anyone endeavoring to do anything these days.
How is it $56.4 trillion, you ask? And not the paltry $11 or $12 trillion commonly referenced? The “real” debt page explains.
How exactly does this $56.4 trillion bill add up? First, there are the federal government’s known liabilities that it is legally obliged to fulfill. These include publicly held debt, military and civilian pensions and retiree health benefits. As of September 30, 2008, these liabilities added up to $13.5 trillion.
Then there are various commitments and contingencies – i.e., contractual requirements that the government is expected to fulfill when, and if specified conditions are met. These include federal insurance payouts, loan guarantees, and leases. As of September 30, 2008, they added up to $1.4 trillion.
So where does the remaining $43 trillion or so come from? That’s what the government has promised to pay in Social Security and Medicare benefits in excess of related revenues. As of January 1, 2008, current and promised future Social Security benefits amounted to $6.6 trillion. And between Medicare’s three programs (hospital insurance, outpatient, and prescription drug), current and future promised Medicare benefits amounted to $36.3 trillion.
Yikes. And also, gulp.
But imagine if America wanted to Do the Right Thing, and settle this $56.4 trillion up. Say we threw all of our efforts as a blessed citizenry behind not only paying this down but paying it off. What would it cost each of us?
Only a tidy $184,000 per person, or $483,000 per household. That’s all. Will that be cash or check?
Those of you who are real gluttons for punishment can also follow the “national debt” clock on Twitter here: @nationaldebt.