According to the Department of Treasury, U.S. debt totaled $14.3 trillion yesterday. That number might sound bad, but it's actually only a part of the obligations that the government faces. According to an analysis by USA Today, the U.S. actually owes far more: $62 trillion.
Dennis Cauchon explains that the government added $5.3 trillion in new obligations in 2010, which are made up mostly of entitlements. Medicare added $1.8 trillion and Social Security added $1.4 trillion. He writes:
Corporations would be required to count these new liabilities when they are taken on -- and report a big loss to shareholders. Unlike businesses, however, Congress postpones recording spending commitments until it writes a check.
The $61.6 trillion in unfunded obligations amounts to $527,000 per household. That's more than five times what Americans have borrowed for everything else -- mortgages, car loans and other debt. It reflects the challenge as the number of retirees soars over the next 20 years and seniors try to collect on those spending promises.
These programs have always been run through the theory that future taxes will pay for future payouts. This is different from a retirement program where a worker accumulates a sum of money that is distributed during retirement. In other words, the government doesn't have cash stored away to support future promised payouts.
Read the full story at USA Today.