Tick, tick, tick goes the time bomb of national doom. Every second the ticking grows louder, but you won’t hear the muffled sound that’s more akin to white noise.
Across all media platforms, the threat goes largely unreported. Perhaps the consequences are unfathomable to discuss in 90-second news segments sandwiched between commercial breaks and panels of talking heads
Members of Congress from both parties are also deaf to the ticking. Inherently they know that any attempt to defuse the bomb means running the risk of being voted out of office. The same is true at the White House, where Donald Trump, like Barack Obama before him, never mentions this impending catastrophe.
Among the hordes of 2020 Democratic candidates, count on the time bomb to be a topic non grata, while Medicare-for-all gains momentum and Medicare-as-is remains a lethal bomb component.
The doom of which I speak is unfunded liabilities — $122 trillion in payments the government owes and has promised its citizens — without the funds to fulfill those obligations.
According to the Treasury Department, total U.S. unfunded liability includes Social Security (along with Medicare Parts A, B, and D) and federal debt held by the public, plus federal employee and veteran benefits.
Before you call me an alarmist, I refer you to the U.S. Debt Clock. Here you can watch our time bomb tick in real time with that $122 trillion in unfunded liabilities as one of the major “fuses.”
Surely, such an incomprehensible number makes you gasp. But now, get ready to gag because in 2023 the “Debt Clock Time Machine” projects unfunded liabilities will be $157 trillion, a $35 trillion increase in only four years.
To better understand why unfunded liabilities constitute the least discussed, consider some “lesser” numbers on the Debt Clock. For example, federal tax revenue is at $3.3 trillion, but spending is $4.2 trillion. This annual imbalance means that not only are we promising too much down the road but that we can’t cover our current costs and fall behind even more — every second of every day.
This conundrum is reflected in the rising national public debt — defined on the Debt Clock as “the face amount or principle amount of marketable and non-marketable securities currently outstanding” — which today stands at $21.9 trillion. But in 2023, the Debt Clock projects the national debt will increase to $25.6 trillion.
Certainly, the United States is a generous nation that wants to take care of its people, -quarter of whom are aging baby boomers retiring at the rate of 10,000 a day. But our nation is on an unsustainable economic path, especially when the government’s present and future obligations are mandated by law.
Consider that in fiscal 2018 “health care” spending was 27% of the federal budget and “pensions” (including Social Security) was 25%. Combined, that 52% of the budget will continue to grow along with an aging population. Meanwhile, there are no efforts in Congress to alter this reckless path, one that severely limits the extent to which we can afford to invest in our collective national future.
At least the Congressional Budget Office was honest when it stated in its 2018 report, “The prospect of large and growing debt poses substantial risks for the nation and presents policymakers with significant challenges.”
Those “substantial risks” and “significant challenges” — now too politically painful to address and resolve — are baked into the debt bomb and scheduled to explode sooner than you think. As reported last June, Medicare’s hospital trust fund is expected to run out of money in 2026. (Hey, 2020 candidates, be sure to mention this when flacking Medicare-for-all.)
Furthermore, on our annual Social Security statements (in small print with an asterisk) we are warned that “by 2034, payroll taxes collected will be enough to pay only about 77% of scheduled benefits.”
Preceding that line, one reads the most absurd, political wishful thinking: “Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time.” Sure they will. Anytime now!
Reducing Social Security benefits — the main driver of unfunded liabilities — will be painful now, but even more painful in 2034 when present inaction forces draconian cuts. (Cue the wheelchair and walker riots.)
We all know the adage “The first step in solving a problem is admitting that you have a problem.” Unfortunately, our elected leaders refuse to admit publicly that our national future is built on financial promises and obligations that our government is incapable of fulfilling.
My recommendation is to aim for increased public awareness. At this moment, a government shutdown clock appears continuously on a major cable network. When that crisis ends, what if every news network continuously displayed the $122 trillion unfunded liabilities debt clock — all 15-digits rapidly ticking in real time — at the same corner of the screen?
Perhaps then, when the public is fully aware of the problem, our leaders will be forced into discussing very tough and real solutions followed by legislative action.
But doing nothing is not an option.
Cross posted at RealClear Politics