by Mitch Kokai
Senior Political Analyst, John Locke Foundation
The federal government’s official debt and deficit figures provide an incomplete account of how deep in the red the federal government really is. Those figures are based on cash accounting rather than the more accurate accrual accounting—which counts obligations as they are made, not merely when the bills come due. Accrual accounting, for example, tells us that current and past federal employees will eventually be paid $6.7 trillion in the form of pensions and other earned benefits. Those payments have not come due, but they are legal obligations that the government cannot avoid. That $6.7 trillion amounts to $54,000 per household, but it isn’t counted as part of the $18 trillion national debt.
This information comes from the latest edition of The Financial Report of the U.S. Government, which anybody can look up to see what the government’s real financial condition is. According to that report, the real liabilities of the U.S. government are $74 trillion, or $603,000 per household. Those include the aforementioned $6.7 trillion in public employee benefits, $25.4 trillion in Social Security benefits, and $28.2 trillion in Medicare benefits. Also counted are the $18 trillion debt, environmental liabilities, and accounts payable.