May 20, 2011. Northbrook, Ill. Many of us are familiar with the National Debt Clock. It’s a dizzying sign showing the current national debt in real time. At the moment, it stands at $14.5 trillion. If you look closely, it goes up by about $100,000 every second. If that weren’t intimidating enough, there’s a second National Debt Clock that is even more astounding. According to the National Debt clock at The Institute for Truth in Accounting, America’s national debt is actually $77 trillion dollars.
The Institute for Truth in Accounting was created by distinguished financial and public policy experts concerned with the quality of public and private organizations' financial reporting. It is the mission of the IFTA to encourage private and public entities to produce financial reports that are comprehensive, comprehensible and transparent and to inform the public of the importance of truthful accounting.
With that mission statement in mind, the non-profit IFTA has launched efforts to raise awareness of the nation’s true national debt in the past. First with Truthin2008.org, then with Truth in 2010, and now with their effort titled Truth in 2012, the IFTA is again attempting to educate the American people on what actually comprises the national debt.
The discrepancy appears to fall under the category of ‘full faith and credit of the United States’. The official $14.5 trillion figure totaling the government’s debt only includes the money we’ve been loaned up to this point. And as can be seen by the ever-changing debt clock, there’s a future price to pay for yesterday’s loans. The official national debt includes items such as Treasury bills and other government bond funds. What’s not included are the things we’ve already promised, and in some cases, already paid for.
Social Security and pensions are only two of many examples. Americans have spent their lives paying into retirement funds that should be paying for themselves. Economists have corrected numerous political pundits by reminding them that while Medicare is in fact broken and unsustainable, Social Security is a profitable and successful program. Elected officials however, chose to spend the Trusts money on other items, thus making Social Security like many of the nation’s pension funds – under funded.
Social Security liabilities aren’t the only debts being left-out of the official $14.5 trillion dollar figure. Future veterans care, Medicare, Medicaid and even interest on future borrowing are conveniently omitted. And according to The Institute for Truth in Accounting, our real national debt is $77 trillion dollars when those items are included.
With House Budget Committee Chairman Paul Ryan (R-WI) proposing a complete overhaul of Medicare and replacing it with a private voucher-type program, the debate has already begun. Meeting fierce resistance from Democrats and even some within his own party, it appears the process will be a long one. With the GOP insisting the debt ceiling not be raised yet again and Democrats refusing to cut spending, the next few months should reveal where the American people stand.