Yep, as Americans, we are responsible for running up $1,028,000 of public obligations for the average family. No kidding.
First there's the hard debt - government's contractual obligations - in the amount of roughly $87,000 per family. That's approximately half the value of the average American home. It's more than chicken feed.
Then there's the semi-hard debt - primarily retirement benefits for civil servants that their governmental employers have not saved. That's almost as much, $73,000 per family. Taxpayers likely won't fork over that money without a contest.
Then there are the best loved brands in government: Social Security and Medicare. They are slated to consume $368,000 per family more than tax revenues over the next 75 years. Beyond 75 years, the two programs will be short another $500,000 per family. (The Treasury, Social Security and Medicare Trustees Reports, GAO, Census Bureau, Pew Trust on the States have additional details if you're interested.)
For perspective, it would take $1,028,000 per family invested today and growing to pay off government's debts, deals, and perceived promises -- federal, state and local -- as they come due.
This amount is in addition to the taxes citizens already pay.
Every year the balance is not paid down it grows at the rate of interest - like an unpaid mortgage.
I make the heroic assumption that taxpayers will not be called upon to make good on any loans that they have co-signed. No FDIC problems, no bad TARP money, no further Fannie and Freddie losses, no student loan troubles, etc...
It is important not to exaggerate the problem. America can cut the total unfunded liability in half easily, simply by deciding the country is not going to pay Social Security and Medicare to anyone now roughly 8 years old or younger or to those not yet born. Simple, right? As a practical matter, yes. As a political matter, no.
Visit MyGovSpending.com/beginner/new for a view of your family's total tax bill, it's share of government spending, and its share of the deficit and the national debt.
The numbers are big. There's not much time.
1) Federal "Debt Held by the Public" http://www.treasurydirect.gov/NP/NPGateway. State and local government contractual debt excluding debt issued by governments for private purposes is from http://www.census.gov/govs/estimate/0600ussl_1.htm
2) Unfunded federal employee retirement benefits from
http://www.gao.gov/financial/fy2008/08frusg.pdf Unfunded State and local employee retirement benefits from miscellaneous sources, soon to be updated with recent data from Pew Center on the States
3) Unfunded "entitlements" GAO, 2008 US Government Financial Report, pg 136, Table 5 and Table 6.
Government sources generally do not make estimates of current year data. MyGovSpending estimated current year data from the recent historical figures reported above using historical rates of increase.
Chamberlain Economics, LLC. provided the model for estimating of tax burdens by family to MyGovSpending, Inc. Unfunded liabilities per family were calculated at the same proportion to total unfunded liabilities as taxes per family are to total taxes.
Contact me for additional details.