We’ve already seen counties and cities brought low and into bankruptcy by their blithe accumulation of future liabilities that they have no hope of honoring. Jefferson County, AL, comes to mind, from a bond sale they had every reason to believe, a priori, that they could not honor in the future.
So does Stockton, CA’s bankruptcy, flowing from a public union pension and insurance program that they, also, must have known in advance that they could not support in future.
These are well understood, and the data that would have predicted these failures easily available to any who cared enough to look—and to face the impending problem squarely.
What of our nation’s debts, though? Chris Cox and Bill Archer describe in a recent Wall Street Journal the hidden—and unfunded—liabilities at the Federal level that make our public national debt of $16 trillion look minor.
These hidden, but too real liabilities—debts—include
the unfunded liability of Medicare, $42.8 trillion
the unfunded liability of Social Security, $20.5 trillion
the unfunded liability of federal employees’ future retirement benefits, $23.5 trillion
But these data are carefully hidden from public scrutiny. Federal Treasury “balance sheets” don’t include things like the debt represented by those Medicare, Social Security, and retirement unfunded liabilities. No, the data are carefully squirreled away in the individual social welfare accounts. You have to know where to look and what to look for—knowledge that heavily trained and experienced folks like Cox and Archer have, but which our politicians know the average American constituent lacks.
This is a time bomb that demands out entitlement programs be brought to heel, our entitlement mentality as a nation to be curbed. Else we’ll go the way of Stockton. And for a nation, that won’t be pretty. Think of Greece today. Think of Weimar Germany of the last century.