At the Washington Post, Brian Lawrence notes a Government Accountability Office report tallying up not just government spending, but spending the government has obligated itself to. Promised spending, to put it another way.
The GAO report was released on the Friday before the Christmas holiday, always a good day for the government to release bad news, and certainly this report was some ugly news. It shows that the nation’s budget deficit is much larger than taxpayers are being led to believe.
“Net present value” means the total that would have to be set aside today to pay the costs of these programs [Medicare and Social Security] in the future. The government puts these numbers in appendices, rather than in headlines. But the costs are real.
In fiscal 2011, the cost of the promises grew from $30.9 trillion to $33.8 trillion. To put that in context, consider that the total value of companies traded on U.S. stock markets is $13.1 trillion, based on the Wilshire 5000 index, and the value of the equity in U.S. taxpayers’ homes, according to Freddie Mac, is $6.2 trillion. Said another way, there is not enough wealth in America to meet those promises.
If the government followed corporate accounting rules, that $2.9 trillion increase would be added to the $1.3 trillion cash deficit for fiscal 2011 that has been widely reported. And a $4.2 trillion deficit is something that Americans need to know about.
Indeed they do, but unfortunately the government would rather obscure this fact from the taxpayers. But there’s no denying that this deficit is real.
Unless some want to argue that Social Security and Medicare aren’t real obligations under current law (and I’d like to hear our friends on the left make that argument), then we must accept that the obligations – the promises – they represent are actual burdens to the taxpayers.
Burdens no tax hike can solve. We need less spending. We need less government, in general.