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Old 11-07-2013, 01:19 PM
 
Location: Portland, OR
8,802 posts, read 7,744,011 times
Reputation: 4501

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We have about $17 trillion in treasury debt outstanding, but $70 trillion in unfunded liabilities.

A liability is as follows: a current obligation of an entity arising from past transactions or events.

I am 40 years away from retiring, but believe it or not, the Federal Government owes me money. I've been paying FICA taxes since I started working so, though it's small, the Federal Government has a current obligation to me.

Here are some other fun facts:

1. This number can change. Raising the age to retire, means testing, eliminating the income cap, etc could reduce this number easily.

2. World GDP is $71.83 Trillion in nominal terms so yeh, our unfunded liabilities are the size of global GDP.

3. No one from both parties seems to care.
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Old 11-07-2013, 01:54 PM
 
Location: Annandale, VA
5,094 posts, read 4,415,297 times
Reputation: 4209
Quote:
Originally Posted by VTHokieFan View Post
We have about $17 trillion in treasury debt outstanding, but $70 trillion in unfunded liabilities.

A liability is as follows: a current obligation of an entity arising from past transactions or events.

I am 40 years away from retiring, but believe it or not, the Federal Government owes me money. I've been paying FICA taxes since I started working so, though it's small, the Federal Government has a current obligation to me.

Here are some other fun facts:

1. This number can change. Raising the age to retire, means testing, eliminating the income cap, etc could reduce this number easily.

2. World GDP is $71.83 Trillion in nominal terms so yeh, our unfunded liabilities are the size of global GDP.

3. No one from both parties seems to care.

No they don't. Social Security was classified as a "tax" by the Supreme Court shortly after it was passed in the 1930s. Once you pay a tax to the government, you lose any control on how it is spent.
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Old 11-07-2013, 01:58 PM
 
20,302 posts, read 12,804,411 times
Reputation: 11472
Quote:
Originally Posted by VTHokieFan View Post
We have about $17 trillion in treasury debt outstanding, but $70 trillion in unfunded liabilities.

A liability is as follows: a current obligation of an entity arising from past transactions or events.

I am 40 years away from retiring, but believe it or not, the Federal Government owes me money. I've been paying FICA taxes since I started working so, though it's small, the Federal Government has a current obligation to me.

Here are some other fun facts:

1. This number can change. Raising the age to retire, means testing, eliminating the income cap, etc could reduce this number easily.

2. World GDP is $71.83 Trillion in nominal terms so yeh, our unfunded liabilities are the size of global GDP.

3. No one from both parties seems to care.

40 years from retiring? Crap!

I would not feel bad. Very few people are going to be able to realize the "retirement" enjoyed by the previous generation. I for one, can retire right now. However, I will probably never retire (unless forced to do so by circumstance), as I like what I am doing.

Retirement is sometimes viewed as "the ring to grasp on the merry-go-round". However, once it is finally reached, what then?
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Old 11-07-2013, 02:08 PM
 
26,332 posts, read 13,370,727 times
Reputation: 12576
I have a interest bearing bank account. It can be assigned to heirs as a inheritance. By your logic the bank has an outstanding liability in excess of 90 trillion.
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Old 11-07-2013, 02:10 PM
 
Location: Fort Worth Texas
12,481 posts, read 9,022,026 times
Reputation: 2527
Quote:
Originally Posted by VTHokieFan View Post
We have about $17 trillion in treasury debt outstanding, but $70 trillion in unfunded liabilities.

A liability is as follows: a current obligation of an entity arising from past transactions or events.

I am 40 years away from retiring, but believe it or not, the Federal Government owes me money. I've been paying FICA taxes since I started working so, though it's small, the Federal Government has a current obligation to me.

Here are some other fun facts:

1. This number can change. Raising the age to retire, means testing, eliminating the income cap, etc could reduce this number easily.

2. World GDP is $71.83 Trillion in nominal terms so yeh, our unfunded liabilities are the size of global GDP.

3. No one from both parties seems to care.
No debt is too much debt , the party will come to a screaming end
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Old 11-07-2013, 02:24 PM
 
Location: Great State of Texas
86,068 posts, read 74,007,680 times
Reputation: 27598
Did they count Obamacare ? They should since they've exempted almost all taxes, penalties, etc. from business and special interest groups. Now there's no one left to "fund" this.
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Old 11-07-2013, 02:50 PM
 
53,890 posts, read 43,218,733 times
Reputation: 33801
Quote:
Originally Posted by VTHokieFan View Post
We have about $17 trillion in treasury debt outstanding, but $70 trillion in unfunded liabilities.

A liability is as follows: a current obligation of an entity arising from past transactions or events.

I am 40 years away from retiring, but believe it or not, the Federal Government owes me money. I've been paying FICA taxes since I started working so, though it's small, the Federal Government has a current obligation to me.

Here are some other fun facts:

1. This number can change. Raising the age to retire, means testing, eliminating the income cap, etc could reduce this number easily.

2. World GDP is $71.83 Trillion in nominal terms so yeh, our unfunded liabilities are the size of global GDP.

3. No one from both parties seems to care.
There are several good actuarial papers that cover this topic (non-partisan) if you feel like searching the web.

Yes, it is an unfunded liability but it's not exactly a completely fair way to view the problem. Due to the cumpulsory nature and backing of the federal govt. whom can institute further taxation etc. it's not as bad as the numbers you are posting.

FYI there have been some changes by the govt. addressing #1 above.

P.S. I loathe means testing as it punishes those that saved instead of spent and is patently unfair. Besides the main problem is the MEDICAL portion of expenses.
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Old 11-07-2013, 03:07 PM
 
Location: Portland, OR
8,802 posts, read 7,744,011 times
Reputation: 4501
Quote:
Originally Posted by Spaten_Drinker View Post
No they don't. Social Security was classified as a "tax" by the Supreme Court shortly after it was passed in the 1930s. Once you pay a tax to the government, you lose any control on how it is spent.
Yes they do. Under the current system, I will be paid money when I turn 65 and the amount I get paid, for how long, etc. is determined based on a formula. This is considered an obligation or liability.
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Old 11-07-2013, 03:13 PM
 
Location: Portland, OR
8,802 posts, read 7,744,011 times
Reputation: 4501
Quote:
Originally Posted by Mathguy View Post
There are several good actuarial papers that cover this topic (non-partisan) if you feel like searching the web.

Yes, it is an unfunded liability but it's not exactly a completely fair way to view the problem. Due to the cumpulsory nature and backing of the federal govt. whom can institute further taxation etc. it's not as bad as the numbers you are posting.

FYI there have been some changes by the govt. addressing #1 above.

P.S. I loathe means testing as it punishes those that saved instead of spent and is patently unfair. Besides the main problem is the MEDICAL portion of expenses.
I'm just saying that currently under GAAP accounting, our obligations are around $70 trillion. You can try to downplay that number if you want. But GAAP isn't some political concept that can be swayed. Now I can agree with you on this point: that 70 trillion doesn't tell the whole story in the context of this whole political debate nor should it. There is no "you owe 70 trillion right this moment."

All I am saying is that under private sector accounting rules, this number is calculated at around $70 trillion. The number itself cannot be disputed, it's applicability to the political discussion; however, most certainly can.
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Old 11-07-2013, 03:50 PM
 
541 posts, read 583,677 times
Reputation: 754
The book The Coming Generational Storm (2004), and its more recent updated version, The Clash of Generations (2012), states that our country actually has something like $211 trillion in indebtedness, known as the fiscal gap. (I believe that accounts for all state and local governments, as well, although the federal portion is by far the majority of it).

I can't remember what the tax amounts were for the updated book, but in the 2004 book, when the debt was just at $51 trillion, the author writes that, if we started paying it off immediately (because there's no way we could do it in one go - it's larger than our GDP), it would require a 64% hike in all federal taxes forever, or a 40% cut in federal spending forever. If we wait 20 years to start doing this, then it becomes 77% and 46%. Wait forty years, it becomes 93 percent and 53 percent.

And these numbers weren't something that the author just came up with; it's based on economic models the government put together.
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