(The Center Square) – The U.S. national debt is closer to $123 trillion, more than four times what the Treasury Department is reporting, Chicago-based Truth in Accounting calculates in its new annual analysis of the nation’s finances.
The federal government has $5.95 trillion in assets and $129.06 trillion worth of bills resulting in a $123.11 trillion shortfall, or a debt burden of $796,000 per U.S. household.
Because of this massive amount of debt and repeatedly poor financial decisions made by lawmakers, TIA gave the U.S. government an “F” grade for its financial condition.
The analysis, “Financial State of the Union 2021” is based on the latest available audited Financial Report of the U.S. Government for the fiscal year ending Sept. 30, 2020. According to the federal report, assuming that current laws and policies don’t change, increase in future debt will grow faster than GDP.
TIA found that the federal government’s overall financial condition worsened by $9.84 trillion in 2020, resulting from stimulus funding and costs imposed on state and local governments by lockdowns.
The official Treasury Department figure of $28 trillion doesn’t account for the short- and long-term economic costs of state shutdowns in 2020 or those that are still ongoing, TIA notes. It also doesn’t include the amount the government owes in unfunded Social Security and Medicare benefits.
“Elected and non-elected officials have made repeated financial decisions that have left the federal government with a debt burden of $123.11 trillion, including unfunded Social Security and Medicare promises,” the report states.
TIA’s total federal debt calculation includes $55.12 trillion in unfunded Medicare benefits and $41.20 trillion in unfunded Social Security benefits.
One reason why the Treasury Department excludes unfunded benefits from its debt calculation is because it claims recipients have no right to future payments; they only have rights to claims through current entitlement laws, TIA notes. Additionally, government documents indicate that laws to reduce or stop future benefits can be passed at any time by Congress.
After Medicare and Social Security, the next greatest debts the government owes are publicly held debt ($21 trillion), military and civilian retirement benefits ($9.4 trillion) and other liabilities ($2.25 trillion).
Unlike many state governments that have Rainy Day Funds or cash reserves, the federal government resorts to printing and borrowing more money or raising taxes instead of cutting spending.
“If the federal government was properly prepared for a crisis with a true rainy-day fund, it would not have had to borrow money,” the report states.
Eighty percent of the government’s revenue comes from individual income and withholding taxes. Excise, estate, gift and other taxes account for 11% of revenue and corporate taxes account for 9%.
Federal spending by specific category includes 23% on Defense and Veteran’s Affairs, 16% on Health and Human Services (Medicare/Medicaid), 16% on Social Security, 5% on interest on the national debt, and 2% on education.