The official United States national debt is defined as nearly $17 trillion, which is a large chunk of change. However, a new study has found that the debt figure is severely underestimated and is actually more than $70 trillion.
James Hamilton, an economics professor at the University of California in San Diego, published a research paper that analyzed the national debt and concluded that the federal government tends to omit other liabilities that would actually increase the debt from $17 trillion all the way to $70.086 trillion.
Hamilton was able to note that federal liabilities are not calculated in the reported numbers. Some of these liabilities could include government guarantees and commitments, such as deposit insurance, housing, government trust funds and even monetary policy actions by the Federal Reserve System.
In addition, according to the study, the two largest items are Medicare and Social Security. The real national debt has grown $13.5 trillion since 2006 and continues to jump by around $2 trillion each year.
“With the federal government today being the sole owner of Fannie and Freddie, it seems appropriate to consider both the direct debt obligations as well as their outstanding mortgage guarantees [which are now treated] as an off-balance sheet liability,” Hamilton stated.
Here are the totals:
– Housing guarantees: $7.5 trillion
– FDIC guarantees: $7.4 trillion
– Social Security: $26.5 trillion
– Medicare: $27.6 trillion
– Other government trust fund liabilities: $1.8 trillion.
“The federal government is the last accounting-free zone in America!” said Tennessee Democratic Congress Jim Cooper in an interview with the New American. Meanwhile, two other former representatives were also devastated by the numbers.
On top of this enormous figure are the annual interest payments. With a rising debt level and soaring interest rates, the federal government could be forking over as much as $1 trillion each year just to pay the interest on the debt.