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You Think The Deficit Is Bad? Federal Unfunded Liabilities Exceed $127 Trillion
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2014 Mar 2, 12:18pm 4,547 views 16 comments
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Does anyone still have the ability to type a summary of an article and some type of conclusion instead of pasting the first couple paragraphs? Just wondering.
turtledove
2014 Mar 2, 1:49pm
This included state, local, and other liabilities as well that are not federal.
It discusses these as separate problems, not as part of the $127T federal problem. Please show me where you are seeing that it's claiming it's all federal, but then lumps in state and local to arrive at the misleading $127T figure... I just don't see where it says that. If you are getting it from another source, please post the link.
As for me being generally right... I didn't write the article. I simply posted it as a discussion topic :0)
Here:
This is non partisan. I believe the information is from the GAO but I'm not positive. It's on the site somewhere.
That looks more realistic. The 127t number includes projections out 50 or 70 years or something silly.
turtledove
2014 Mar 2, 2:04pm
Does anyone still have the ability to type a summary of an article and some type of conclusion instead of pasting the first couple paragraphs? Just wondering.
But then you are limited to my subjective interpretation of the facts presented in the article in question... which is okay in my case because I'm super smart and always right... But what if the person summarizing the article for you were an idiot?
But then you are limited to my subjective interpretation of the facts presented in the article in question... which is okay in my case because I'm super smart and always right... But what if the person summarizing the article for you were an idiot
That's the whole point of a summary, to see if the person posting it is an idiot. I'm not limited to anything, I would still read the article. I thought you said you were super smart.
turtledove
2014 Mar 2, 2:23pm
I thought you said you were super smart.
The problem with idiocy is that is doesn't lend itself well to self assessment. "Crazy" and "sense of humor" are pretty much the same.
(In case you didn't pick up on the tongue and cheek... I was kidding about the super-smart, always-right part.)
As for providing summaries, I guess I just think that it's better when everyone reads the article and then the discussion develops and evolves organically. Telling readers what to think before they've had a chance to read the article could influence the way they perceive the information. I guess it strikes me as a very Fox News way of presenting a news story.
Heraclitusstudent
2014 Mar 2, 2:40pm
The US GDP is 16 trillions now.
Assuming a modest nominal increase of 4% a year, that is $1000 trillions over the next 50 years.
4% is modest because it assumes almost no growth beyond inflation and population growth.
Use a more reasonable 5% (3% inflation + 1% population growth + 1% productivity improvement) and the US GDP total over the next 50 years is $2850 TRILLIONS. So $127 Trillions is actually a small number.
These problems are modest and can be solved easily by (1) raising the retirement age by a few years, (2) raising taxes slightly, and (3) raising what pension owners pay for their pensions.
AD
2014 Mar 2, 2:56pm
These problems are modest and can be solved easily by (1) raising the retirement age by a few years, (2) raising taxes slightly, and (3) raising what pension owners pay for their pensions.
Another way is to spur GDP/economic growth such as increase exports. One export is natural resources like coal. More GDP means more tax receipts.
(In case you didn't pick up on the tongue and cheek... I was kidding about the super-smart, always-right part.
So was I.
I'm not picking on you, just the seeming lack of thinking that seems to get worse every year. The norm for discussion used to be to state your case then provide support. Now it's read something and put it up as your case without any sort of thinking at all. Worse there seems to be an ever growing number of people that think that whatever op/ed crap they find on the internet that agrees with their thinking "proves" it's true. Pretty sad people really can't tell the difference between opinion and analysis. Is the internet really dumbing people down to that degree or are the dumb people showing up in ever greater numbers?
turtledove
2014 Mar 3, 2:04am
That looks more realistic. The 127t number includes projections out 50 or 70 years or something silly.
Why is that silly? We are promising to have funds at that time. Are we under no obligation to continuously demonstrate the soundness of a particular, promised program? How else would we know that we need to make changes in order for the money to be there at some point in the future? People will, in fact, be depending on this money in 50 or 70 years. I doubt they will find it silly when the money just isn't there.... And I doubt that the younger generations will find it silly that they suddenly have to make up for a shortage.
Are you okay with such predictions being made about climate change? Those go out pretty far into the future, and take currently known information and combine it with assumptions based on that currently known information. Sure, someone could invent something new that would expand the pie that is our economy... And something could happen to the Earth that would alter the assumptions used to make today's predictions about climate change... But that doesn't mean that we shouldn't at least try to anticipate future problems based on what we know now.
turtledove
2014 Mar 3, 2:20am
I'm not picking on you, just the seeming lack of thinking that seems to get worse every year. The norm for discussion used to be to state your case then provide support. Now it's read something and put it up as your case without any sort of thinking at all.
I never thought you were picking on me, at all. We just have different ideas about the purpose of posting threads. Based on your belief that a thread creator is putting something "up as your case" is a distinct difference in the way we look at it.
I don't post things because they support my view of the world. I post them because I think there's something interesting there that might make for a good discussion. My posts are not some kind of snapshot of my world view. They are more of a snapshot of what kinds of articles pique my interest.
HydroCabron
2014 Mar 3, 2:26am
Are we under no obligation to continuously demonstrate the soundness of a particular, promised program?
Assume you're going to live another 50 years. You have $2 million in housing, food, medical, and transportation expenses to meet over that time. You can't get out of these expenses: you are committed to them unless you commit suicide.
Multiply that by the roughly 100 million others in the United States who will live another 50 years, and we see collective liabilities, going forward, of $200,000,000,000,000 - that's $200 trillion. And that's only for those 100 million of you, not the entire population of the country.
Do you believe that your future food, rent, and medical spending will cripple economic growth? If they won't, why would future pension spending do so?
Calling future expenses "liabilities" is technically true, but it gives journalists, whose profession is dying, yet another means to scare the hell out of people by spinning such expenses as looming catastrophe.
Right now, scaring people is the only thing most journalists have.
Pensions that can't be covered will be reduced. Also, whatever Forbes says, pension payments are not a barrier to economic growth; wealthy people stashing cash in the Caymans is.
HydroCabron
2014 Mar 3, 2:32am
(2) raising taxes slightly
Ooh, that's a major doctrinal deviation. You will be punished for saying that!
Heraclitusstudent
2014 Mar 3, 3:05am
Oh silly... boomers will never allow this. Everything must trickle down from the heavens and into their tax deferred accounts....
People do what they can.
Pensions that can't be covered will be reduced. Also, whatever Forbes says, pension payments are not a barrier to economic growth; wealthy people stashing cash in the Caymans is.
This is correct.
Also, Social Security is in the social security trust fund which holds bonds. That is, money the US owes itself.
Defining these as unfunded liabilities is a choice that doesn't make so much sense. The bonds are the assets which offset much of the liabilities. It's true that the government may need to borrow more to pay these, but Heraclitusstudent and Hydrocabron are correct, this is not the issue that the fear mongerers and right wingers wish to portray it as.
Although the battle over a two-year budget deal and the national debt limit in Washington, D.C. has received the lion’s share of media attention recently , the bigger, more ominous threat facing taxpayers are unfunded liabilities—the difference between the net present value of expected future government spending and the net present value of projected future tax revenue, particularly those associated with Social Security and Medicare.
While federal unfunded liabilities are important, state-level unfunded pension liabilities also pose serious obstacles. In Texas, the recent 2013 Employees Retirement System (ERS) Valuation Report outlines the funding shortages this pension system faces and there is some indication it may be unable to pay beneficiaries by 2052.
The federal unfunded liabilities are catastrophic for future taxpayers and economic growth. At usdebtclock.org, federal unfunded liabilities are estimated at near $127 trillion, which is roughly $1.1 million per taxpayer and nearly double 2012’s total world output.
With about 134,000 active members in Texas’ ERS at the end of fiscal year 2013, the total unfunded liability was $7.2 billion—or $54,000 per active member. Despite the much smaller future net debt obligations in ERS compared with federal programs, there are similarities how we got here.
Laurence Kotlikoff and Scott Burns’ book entitled The Coming Generational Storm: What You Need to Know About America’s Future argue federal unfunded liabilities are primarily from a generational accounting problem, in which the dependency ratio of retirees to taxpayers is declining from an aging population.
The authors’ state, “today there are about 4 payees for every 1 beneficiary, but by the year 2030 there will only be 2 payees for every 1 beneficiary. Simple arithmetic will note that this is not sustainable over the long run.â€
To understand the magnitude of this problem, the authors note one solution that includes all the following: “raise income taxes by 17 percent, raise payroll taxes by 24 percent, cut federal purchases by 26 percent, and cut Social Security and Medicare benefits by 11 percent.â€
In the current political and economic environment, these changes are highly unlikely, but it shows the substantial economic costs associated with these large unfunded liabilities.
more...
http://www.forbes.com/sites/realspin/2014/01/17/you-think-the-deficit-is-bad-federal-unfunded-liabilities-exceed-127-trillion/
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