September 13, 2011: By James W. Schneider
According to the National Debt Clock as of September 9, 2011, the U.S. National debt was $14.7 trillion and rising at a rate of over $1.3 trillion per year. The national debt represents money our federal government has borrowed and still owes to others.
Our $14.7 trillion national debt does not include our nations’ unfunded liabilities. Unfunded liabilities represent promises to make future payments for which there will not be enough money to pay those benefits under current law. The obligation to pay those benefits will fall upon the labors of our children. The two programs with the largest amount of unfunded liabilities are Social Security and Medicare. Depending on which future assumptions are used in the various projection models, the dollar value of our nation’s total unfunded liabilities range from $54 to $115 trillion. The National Debt Clock computes our unfunded liabilities at $115 trillion or over seven times our national debt. In August 2011, the USA Today reported that our unfunded liabilities were $61.6 trillion or over $528,000 for every American household. Regardless of which projections are right, if America survives her rapidly approaching fiscal crises, then, unless we make significant changes to our unfunded programs, you will pass your portion of the debt to your heirs.
The financial site www.finweb.com defines an insolvent estate as follows.
Insolvent estates are those where the decedent’s assets are not sufficient to cover debts after death. As a result, there will be no inheritance left to the beneficiaries of the estate, and those beneficiaries may further have a legal obligation to help resolve the debts. Thankfully, less than 10 percent of all estates are insolvent, so it is not likely you will have to face the problem.
In our personal lives, most Americans would be thoroughly disgusted and completely embarrassed at the thought of leaving huge debts to their children. However, in our public lives, we the people of the United States have mandated that 100 percent of our beneficiaries have a legal obligation to resolve our debts. Why is it unacceptable in our personal lives but perfectly acceptable in our public lives? It is not!
The economic history and political conditions surrounding the decisions that led to the inadequate funding of these social programs may have made their enactment understandable; however, with the clarity of 20/20 hindsight, we can now safely argue that the entire category of unfunded future obligations should forevermore be banned as not only fiscally irresponsible but morally reprehensible.
It is time that all Americans stand up and acknowledge that it is wholly immoral to saddle future generations with the greed and poor fiscal management decisions of current generations. If we do not rectify our fiscal malfeasance, our progeny may justifiably cut us off at the knees and leave us without recourse. Considering the profligate mess we have left them, who could blame them? The Baby-Boom generation and the representatives we have elected to do our bidding in Washington have shown our true colors as self-serving, over spenders unconcerned with the condition of the legacy we bequeath to our heirs. Shame on us for destroying the inheritance the Greatest Generation left us. If we wish to restore our honor then we must restore the legacy bequeathed to us and restore the American tradition of leaving the next generation better off then the previous one – not chain them to an unsustainable anchor of debt. It is sad when we recognize that with a little forethought, common sense and moral leadership we could have completely avoided this fiscal problem. The good news is that with a concerted effort we may still have time to correct our profligate mistake without reducing the benefits promised to our seniors.
We the people can have any safety net program or benefit plan we want. All we have to do is pay for it during our time and never expect or allow any future generation to pay for it on our behalf. Just as it will become our children’s job in their time, it is our job in ours to take care of ourselves - and our children. We have no right to borrow against our children’s future. How did we ever let such a notion take hold in America?
Unless the majority of Americans have the courage and moral fortitude to rise up and say “enough”, this generation will be responsible for the greatest undesirable transformation of the American experiment in history and may in fact lead to America’s destruction. What a legacy! We may already be too late, but if we wait any longer, we surely will be.
We need two strategies to deal with the staggering level of our unfunded liabilities. First, the short-term strategy is to enact those remedies necessary to minimize and then reverse the damage caused by our unfunded programs by funding those obligations as quickly as practical. Second, the longer-term strategy is to pass a Constitutional amendment that forever forbids Congress from enacting new or modifying existing laws that would permit unfunded social safety net programs that would once again mortgage our nation’s future.
