Every one of you owes over $500K!

[Tigermike 3,055]

Entitlement liabilities cost over $500K per household

posted at 10:00 am on May 19, 2008 by Ed Morrissey

Uncle Sam wants you … to cough up a half-million dollars to fund current entitlement obligations. That would cover the lifetime benefits of all currently eligible participants in federal programs such as Medicare and Social Security — and that number will keep growing. Don’t expect to hear those figures from Capitol Hill, though, because Congress does not require the federal government to follow the same reporting rules that they have applied to businesses:

Bill for taxpayers swells by trillions

By Dennis Cauchon, USA TODAY

The federal government's long-term financial obligations grew by $2.5 trillion last year, a reflection of the mushrooming cost of Medicare and Social Security benefits as more baby boomers reach retirement.

That's double the red ink of a year earlier.

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 dwarfs the $162 billion the government officially announced as last year's deficit, down from $248 billion a year earlier.

"We're running deficits in the trillions of dollars, not the hundreds of billions of dollars we're being told," says Sheila Weinberg, chief executive of the Institute for Truth in Accounting of Chicago.

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 deteriorating condition of these programs doesn't show up in the government's bottom line, but the information is released elsewhere — in Medicare's annual report, for example. Since 2004, USA TODAY has collected the information to provide taxpayers with a financial report similar to what a corporation would give shareholders. Big new liabilities taken on in 2007:

• Medicare: $1.2 trillion.

• Social Security: $900 billion.

•Civil servant retirement: $106 billion.

•Veteran benefits: $34 billion.

The multitrillion-dollar loss is a more meaningful financial number than the official deficit, says Tom Allen, chairman of the Federal Accounting Standards Advisory Board, which helps set federal accounting rules.

Medicare has an unfunded liability of $30.4 trillion.

That means, in addition to paying all future Medicare taxes, the government needs $30.4 trillion set aside in an interest-earning account to pay benefits promised to existing taxpayers and beneficiaries. The amount is sure to rise when the oldest of 79 million baby boomers — 62 this year — reach 65 and become eligible.

Economist Dean Baker says the huge liabilities are potentially misleading because future generations will have greater income. "If we fix health care, then our deficits can be easily dealt with," he says.

USA

Corporations and most state governments have to declare long-term liabilities when created. The federal government, however, only declares the annual cost of entitlement programs, using the flimsy excuse that future Congresses could adjust or eliminate the programs in the future. That sleight of hand keeps the federal deficit numbers ridiculously low, and it keeps pressure for entitlement reform almost as low.

President Bush tried to address this in 2005, starting with the much more moderate problem of Social Security. Democrats insisted that no problem existed at all, and that the fiscal stability of Social Security was guaranteed for decades. Instead of acting to correct the ballooning deficit in this one program, the Democrats demagogued, claiming that Bush wanted to steal Social Security benefits from seniors — a charge Barack Obama echoed yesterday against John McCain.

McCain voted against adding Medicare Part D, opposing George Bush during the first term, and one can understand why in looking at these numbers. Just in the last year, Medicare took on $1.27 trillion in new liabilities, Social Security $900 billion, and civil-service retirement $106 billion. That comes to almost $2.3 trillion in new liabilities, which outstrips the entire federal budget of 2003. At some point, those bills have to get paid, and that’s assuming we stop adding liabilities from this point forward.

We don’t need demagoguery. We need real entitlement reform that acknowledges reality before American workers become nothing more than serfs providing funding for a massive nanny state.

link

Federal Budget and Spending

Recommendations:

Freeze 2007 discretionary spending and remember that the core problem is runaway federal spending, not the budget deficit or taxes that are too low.

Rein in runaway entitlement spending.

Reform the budget process.

http://www.heritage.org/research/features/...area/Budget.cfm

[arnaldoabru 11]

How much do you think the War is costing us?

[Tigermike 3,055]

How much do you think the War is costing us?

As you can see this article was concerning Entitlement liabilities. I know that went over your head at the speed of sound. But there it is again. So if you would like to start another thread concerning the cost of the war, feel free to do so.

Just don't forget to link your sources.

[arnaldoabru 11]

I didn't have source. I just simply asked a question. Your topic was about what this and that cost us.

[Tigermike 3,055]

I didn't have source. I just simply asked a question. Your topic was about what this and that cost us.

So you didn't read the article, you just posted your reply. Typical.

You not staying on subject is typical as well.