UPDATED: The Bill Will Come Due
Kevin Williamson has totaled America’s public debt, and his essay makes for scary reading:
So that’s $14 trillion in federal debt and $2.5 trillion in state-and-local debt: $16.5 trillion. But I’ve got some bad news for you, Sunshine: We haven’t even hit all the big-ticket items. …
… “Half the states’ pension funds could run out of money by 2025,” [Northwester University Prof. Joshua Rauh] says, “and that’s assuming decent investment returns. The federal government should be worried about its exposure. Are these states too big to fail? If something isn’t done, we’re facing another trillion-dollar bailout.” …
So how much would the states have to book to fully fund those liabilities? Drop in another $3 trillion. Properly accounting for these obligations, that takes us up to a total of $19.5 trillion in governmental liabilities. …
The debt numbers start to get really hairy when you add in liabilities under Social Security and Medicare — in other words, when you account for the present value of those future payments in the same way that businesses have to account for the obligations they incur. Start with the entitlements and those numbers get run-for-the-hills ugly in a hurry: a combined $106 trillion in liabilities for Social Security and Medicare, or more than five times the total federal, state, and local debt we’ve totaled up so far. In real terms, what that means is that we’d need $106 trillion in real, investable capital, earning 6 percent a year, on hand, today, to meet the obligations we have under those entitlement programs. For perspective, that’s about twice the total private net worth of the United States. (A little more, in fact.)
Little wonder the Democrats in power think nothing of layering on the billions: Billions hardly register in the face of that mountain of debt. The cover of the penultimate National Review, in which Williamson’s piece appears, shows a distressed boy looking at a chalkboard that reads “130 Trillion: What We Owe.” The image got me pondering how one could illustrate the size of a trillion dollars, and I’m still pondering. One idea is to start in the upper left corner of the chalk board with a single dot, labeled “trillion.” The next row would be labeled “billions” and would require 1,000 small dots. The next row, “millions,” would easily exceed the capacity of the average classroom chalkboard.
My personal circumstances are such that the lessons of debt are hourly on my mind. To oversimplify, a slightly less luxurious lifestyle a decade ago (with dinners out and the like) would have meant that I wouldn’t be quitting coffee because a large $8 can of grinds every two weeks or so is something I can live without.
It brings the mind back to that episode of Seinfeld that made famous the phrase, “serenity now.” More fitting would be the modification,”austerity now.”
Kevin Williamson checked in to send along a graphic illustration of $1 trillion. The upshot:
In case you can’t see it, that’s a standard-sized man in the bottom left-hand corner. (Check the link for an explanation.)