Niall Ferguson: US Unfunded Liabilities Top $238 TRILLION!!

Somehow we missed this over the summer.
In an excellent economic lecture series presented by the BBC, economic historian (& author of the recent Newsweek piece Hit the Road Barack) Niall Ferguson states that the total US unfunded liabilities is a mind-blowing $238 TRILLIONover 16 times the total US debt claimed by the Treasury Department of $16 trillion!!

Can you say QE to INFINITY….AND BEYOND!!!  ?  There is simply no other viable solution. Ferguson’s full lectures can be downloaded here:

The rapidly rising quantity of these bonds certainly implies a growing charge on those in employment, now and in the future, since – even if the current low rates of interest enjoyed by the biggest sovereign borrowers persist – the amount of money needed to service the debt must inexorably rise.

But the official debts in the form of bonds do not include the often far larger unfunded liabilities of welfare schemes like – to give the biggest American schemes – Medicare, Medicaid and Social Security.

The most recent estimate for the difference between the net present value of federal government liabilities and the net present value of future federal revenues is $200 trillion, nearly thirteen times the debt as stated by the U.S. Treasury.

Notice that these figures, too, are incomplete, since they omit the unfunded liabilities of state and local governments, which are estimated to be around $38 trillion.

Past, Present and Future: Government debt as percentage of GDP

Country 2000 2012 2017
China 16.4 22 10.1
France 57.4 89 84.6
Germany 60.1 78.9 71
Greece 103.4 153.2 136.8
Ireland 37.5 113.1 109.2
Italy 108.5 123.4 118.9
Japan 140.1 235.8 256.6
Portugal 48.4 112.4 109.2
Spain 59.4 79 91.6
United Kingdom 40.9 88.4 86.8
United States 54.8 106.6 113

Source: IMF, April 2012 World Economic Outlook. Figures for 2012 and 2017 are estimates.

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