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UC Economics Prof Says Real National Debt is $70 Trillion
Posted By Daniel Greenfield On August 15, 2013 @ 10:53 am In The Point | 6 Comments
There are 300 billion stars in the Milky Way and there are 100 trillion atoms in a human cell. But here’s a number that might even make Carl “Billions and Billions” Sagan faint.
Forget the number of stars and the number of atoms. Let’s look at the number of unfunded government liabilities.
The federal government has been low-balling the public for years on how much debt it actually has, a University of California, San Diego economics professor says, adding that the real amount is $70 trillion – not $16.9 trillion.
Hamilton believes the government is miscalculating what it owes by leaving out certain unfunded liabilities that include government loan guarantees, deposit insurance, actions taken by the Federal Reserve as well as the cost of other government trust funds. Factoring in those fees brings the total amount the government owes to a staggering $70 trillion, he says.
But surely it couldn’t be that bad. Could it?
He includes the implicit mortgage guarantees of Fannie Mae and Freddie Mac: ”With the federal government today being the sole owner of Fannie and Freddie, it seems appropriate to consider both the direct debt obligations … as well as their outstanding mortgage guarantees [which are now treated] as an off-balance sheet liability.” Added together, housing guarantees ($7.5 trillion), FDIC guarantees ($7.4 trillion), Social Security ($26.5 trillion), Medicare ($27.6 trillion), and other government trust fund liabilities ($1.8 trillion) come to $70 trillion. That’s an increase of $13.5 trillion just since 2006, and is growing by more than $2 trillion a year.
But as 2016’s leading candidate would say, “What difference does it make?”
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