The US Gov’t Has $6 Trillion in Assets and $130 Trillion in Unfunded Liabilities

Not to worry though. That $130 trillion will soon be in monopoly money

Through the first six months of fiscal 2021, the US government ran a record $1.7 trillion budget deficit. And there is no end in sight to the borrowing and spending. Just last month, the national debt eclipsed $28 trillion for the first time. But it’s even worse than that.

A lot worse.

When you include unfunded liabilities such as Social Security and Medicare, that actual US debt stands at $123.11 trillion, according to the Financial State of the Union 2021 published by Truth in Accounting.

In order to pay off all of Uncle Sam’s liabilities, every taxpayer in the US would have to write a check for $796,000.

I don’t know about you, but I don’t have it.

The federal government has $5.95 trillion in assets and $129.06 trillion in liabilities. If it were a private company, the US government would be bankrupt.

Here’s a breakdown of Uncle Sam’s liabilities in broad categories.

  • Medicare benefits – $55.12 trillion
  • Social Security obligations – $41.2 trillion
  • Publicly held debt – $21.08 trillion.
  • Military and civilian retirement benefits $9.41 trillion
  • Other liabilities – $2.25 trillion

According to Truth in Accounting’s analysis, the US government’s financial situation has deteriorated over the last year. Based on the latest available audited financial reports, its financial condition worsened by $9.84 trillion in 2020.

Interestingly, the Treasury Department only includes $175.30 billion of Social Security and Medicare liabilities on the federal balance sheet; according to government documents, recipients do not have the right to benefits beyond the benefits currently being paid and laws to reduce or stop future benefits can be passed at any time. Truth in Accounting assumes no changes in the current Social Security or Medicare schemes. This is a pretty safe assumption considering these programs are generally considered the “third rail” of politics. In other words, politicians dare not touch them.

Truth in Accounting’s conclusion feels a lot like an understatement.

Because the federal government would need such a vast amount of money from taxpayers to cover this debt, it received an “F” grade for its financial condition.”

Can we go with an F-?

The only thing that keeps the federal government solvent is the fact that the Federal Reserve backstops the bond market and monetizing the debt. The central bank buys US Treasuries on the open market with money created out of thin air (debt monetization). This creates artificial demand for bonds and keeps interest rates low. All of this new money gets injected into the economy, driving inflation higher. We see this playing out before our eyes as the Fed continues to expand the money supply by record amounts.

Last week, Jerome Powell acknowledged that the federal budget is on an “unsustainable trajectory.” But he insists that the current debt load is sustainable. “There’s no question of our ability to service and issue that debt for the foreseeable future,” Powell said.

Of course, that’s only true as long as the Fed keeps monetizing. And that could become problematic if inflation runs out of control. The only way to battle inflation is to tighten monetary policy. And the only way to feed the ravenous federal budget monster is to keep monetary policy loose.

What will Powell choose?

Of one thing we can be certain — the US government won’t suddenly stop spending money.

There is always an excuse to borrow and spend more. Today, it’s the economic emergency caused by the coronavirus. And when times are good, the politicians will tell us it’s time to “invest in our future.” There is never a time to “prioritize concern” about the budget deficits and paying down the national debt. It’s always “kick the can down the road,” as Powell is recommending now. That works fine – until you run out of road.

That road is looking mighty short.

Source: Schiff Gold

  1. ken says

    Social Security and Medicare were enacted during times of low debt and were funded. Americans were skilled and had massive manufacturing which paid well.

    Then US companies off shored the manufacturing with the tacit approval of government attempting to keep the inflation low using cheap offshore labor.

    After a couple of generations Americans became unskilled workers distributing all the foreign goods and mowing each others yards. These jobs pay half or less then the manufacturing jobs and require no skills as they used to be defined.

    Inflation has completed the job of impoverishing Americans. Where $5 per hour used to provide a decent living,,, $30 per hour is required today. And inflation is screaming ahead regardless of what the liars at the Fed and Treasury are saying.

    The Federales stole what cash was left in SS during the Clinton administration and replaced with non interest bearing bonds. (IOU’s) This is how Clinton managed to make it look like he balanced the budget.

    Social Security was enacted due to the industrial revolution which scattered families. Many ‘children’ abandoned their parents during that time barely surviving themselves.

    Today the same,,, many ‘children’ have no time for taking care of mom and pop. They are both working to barely survive and most are in debt up to their ears trying to live a $50 per hour life on $20 per hour. They simply dump their parents onto the government.

    The government today lavishes money to parents for children but very little when it come to disabled seniors. Not suggesting they do so,,, just saying what it is.
    Notice little is said about all the programs for children by economic writers. It’s always social security and Medicare. And they never have any suggestions to rectify the situation. They simply want to say SS is unfunded which it is but so is your mortgage and that car you bought on time,,,

    Social Security could have been much better if government paid a decent interest on the individuals account and it would have been much easier to change the system.

    With no interest paid,,, with low paying employment,,, with all the added programs sucking money from social security,,, it can never be self sufficient again.

    Edit: In 2019 Social Security was fully funded and Medicare was funded at 57% of payroll taxes. Today with the retarded lockdowns it will be really bad.

    1. GMC says

      Another problem Ken, is the Federal Gov. took themselves and all the big Corporations along with all Government unions off of SS. They didn’t have to pay into the Social system since 1985. That took Trillions with a T , of dollars out of the system. That is 14% of all those trillions of dollars in Taxes. The US Gov. is nothin more than Liars _ Thieves and Murderers and should be treated as such.

  2. Sam RI Digsby MD says

    Any of that 6 trillion include gold? The rumor is it is only gold plated tungsten. You know, the “ole switcheroo”.

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