07.09.2015

by William Edstrom

The United States (US) government often cites $18 trillion as the amount of money that they owe, but their actual debts are higher. Much higher.
How big is USA's debt?

The government in the USA owes $13.2 trillion in US Treasury Bonds, $5 trillion in money borrowed by the US Federal government from Federal government trust funds like the Social Security trust fund, $0.7 trillion for state bonds issued by the 50 states, $3.7 trillion for the municipal bond market (US towns, cities and counties), $1.97 trillion still owing by Freddie Mac and Fannie Mae, mostly for bad mortgages in years gone by, $6.23 trillion owed by US government authorities other than Fannie Mae and Freddie Mac, $1.04 trillion in loans taken out by the US Federal government (e.g. government credit card balances, short term loans) and $0.63 trillion in loans owed by government authorities (e.g. their government credit card balances, short term loans). As of April 1, 2015, according to the Federal Reserve Bank's Financial Accounts of the US report, the government in the USA has $32.5 trillion in debt excluding unfunded government pension debts and unfunded government healthcare cost.

Debt is money that has to be paid. The government in the USA also has to pay $6.62 trillion for unfunded pension liabilities, as of April 1, 2015. There are thousands of government pension plans in the USA (e.g. County, State, Teacher's, Police). The Federal Employees Pension Plan is now short $1.9 trillion according to the Fed's March 2015 statement plus $4.7 trillion in unfunded state and municipal pension liabilities according to State Budget Solutions which calculates on actual pension returns (approx. 2.5% per year from 2009 to 2014, instead of the fantasy 'assumption' of an 8% return used by the Fed to guesstimate pension fund money). The largest governmental pension fund in Puerto Rico ran out money (became insolvent) in 2012 and the government now has to pay $20.5 billion for that. Pension contributions into government pension plans have been less than what these pension plans pay out to retirees which is why the US government was short by $6.62 trillion for government pensions as of April 1, 2015.

The DJIA has fallen 12.5% since the Spring. $6.3 trillion in governmental pension plan money was invested in wall street as of April 1st. Additional government pension plan losses have been, so far this year, $0.79 trillion. As of August 29, 2015, the government in the US owes $7.41 trillion for pensions. Every additional 10% the DJIA drops (from it's Spring 2015 high), is another $0.63 trillion in unfunded pension costs that the US government has to pay.

The US Federal government owed $1.95 trillion in unfunded entitlements for the Federal Employees Pension Fund as of April 1, 2015. Unfunded entitlements are health care benefits for retirees above and beyond Medicare benefits. States, municipalities and governmental authorities owe an additional $4.2 trillion for retiree health benefits. Medicare and Medicaid costs, about $0.83 trillion in 2014, escalate 6% a year and Obamacare adds $0.18 trillion a year in governmental health costs, mostly for subsidies. Medicare, Medicaid and Obamacare costs will escalate to $1.28 trillion in 2018.

Bottom line, as of September 3, 2015, the government in the USA owes $46.04 trillion (bonds, unfunded pension costs, unfunded healthcare costs, credit card balances and loans).

How does USA intend to pay government debt?

SNIP