Think America Owes $37 Trillion? It’s Far Worse Than That, by Brian McGlinchey

Any executive whose company did its accounting the way the federal government does would be thrown in jail. From Brian McGlinchey at startrealities.substack.com:

Misleading accounting hides the stunning scale of DC’s financial obligations

When asked how far the US government has plunged into the red, many fiscally-conscious Americans will tell you the national debt has reached $37 trillion. As distressing as that official number is, America’s true fiscal situation is even worse — far worse. According to a barely-publicized Treasury report, the actual grand total of Uncle Sam’s obligations is more than $151 trillion.

That huge discrepancy springs from the fact that the federal government doesn’t hold itself to the same accounting standards it imposes on businesses. Rather than using accrual accounting — which recognizes expenses when they’re incurred — our Washington overlords self-servingly use simple cash accounting, only recognizing expenses when they’re paid. As a result, discourse on federal obligations solely focuses on the national debt, comprising Treasury bills, notes and bonds.

Once a year, however, an obscure report delivers a more accurate version of Uncle Sam’s balance sheet. While it receives almost no attention from journalists or public officials, the Treasury Department is required to submit an annual report to Congress detailing the government’s financial condition. Critically, the 1994 law compelling this report mandates that it reflect “unfunded liabilities” — that is, commitments made without any dedicated assets or income streams to ensure they’ll be kept.

One of the larger categories of those unfunded liabilities is future federal employee and veterans benefits. At the end of the 2024 fiscal year, this alone represented a $15 trillion obligation. However, by leaps and bounds, the largest unfunded liabilities spring from America’s social insurance obligations — primarily Social Security and Medicare. At fiscal-year end, these liabilities totaled a towering $105.8 trillion.

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