Sunday, May 8, 2011

Unfunded liabilities of $99 trillion

Here is an interesting speech from May 2008, before the financial crisis, when they were projecting a $48 billion surplus in 2012.

Richard Fisher noted that Social Security and Medicare had unfunded liabilities of $99 trillion at that time, with Medicare alone at $85 trillion:

Please sit tight while I walk you through the math of Medicare. As you may know, the program comes in three parts: Medicare Part A, which covers hospital stays; Medicare B, which covers doctor visits; and Medicare D, the drug benefit that went into effect just 29 months ago. The infinite-horizon present discounted value of the unfunded liability for Medicare A is $34.4 trillion. The unfunded liability of Medicare B is an additional $34 trillion. The shortfall for Medicare D adds another $17.2 trillion. The total? If you wanted to cover the unfunded liability of all three programs today, you would be stuck with an $85.6 trillion bill.

It wouldn't be too hard to figure out the current numbers but I'm sure they are much higher. But no worries, right? The higher the debt the better, right?

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