Unfunded liabilities

With all the 'conversation' about fiscal cliffs, there is one giant turd in the punchbowl that is not being mentioned by either side. Both parties are complicit because nobody wants the real truth of where we are to be brought to light. It is bad, really really bad. Mort Zuckerman at US News and World Report sums it up best:

Mort Zuckerman: Brace For an Avalanche of Unfunded Debt
All eyes have been on the clear and present danger of the fiscal cliff�understandably�but there's a sound in the mountain range that's even scarier than the cliff. It's the sound made by an avalanche, the trillions of dollars of debt that's heading our way, gathering speed and mass. For most people, it's out of earshot now, and that's the way our government prefers to play it in its financial statements. Liabilities are not set out there in accordance with the well-established norms of the private sector, where this overhang of liabilities would set off alarm bells in the markets, with boards of directors in emergency sessions.

Mort sets up the story -- you should read the entire article. Show me the money:

The greatest fiscal challenge to the U.S. government is not just its annual deficit but its total liabilities. Our federal balance sheet does not include the unfunded social insurance obligations of Medicare, Social Security, and the future retirement benefits of federal employees. Only in the small print of the financial statements do you get some idea of the enormous size of the unfunded commitments. Today the estimated unfunded total is more than $87 trillion, or 550 percent of our GDP. And the debt per household is more than 10 times the median family income.

The public doesn't know about these awesome liabilities because the totals appear only in actuarial estimates. As Chris Cox, former chairman of the Securities and Exchange Commission, and Bill Archer, former chairman of the House Ways and Means Committee, recently noted in the Wall Street Journal, the real annual accrued expense of Medicare and Social Security alone is $7 trillion. The government's balance sheet does not include any of these unfunded obligations but focuses on the current year deficits and the accumulated national debt. Cox and Archer reported that the annual budget deficit is only about one fifth of the more accurate figure.

A bit more:

Let's remember that 100 percent of the payroll taxes for Social Security and Medicare are spent in the year that they are collected, leaving no leftovers for the unfunded obligations. And this doesn't take into account other risks, hardly minimal, like the fact that the Federal Housing Authority confronts a $16.3 billion net deficit after its latest audit that may force a taxpayer bailout for the first time in its 78-year history. And just four years from now, in 2016, the Disability Insurance trust fund will be fully depleted.

A lot more at the site -- we do not have a revenue problem, we have a severe spending problem. This needs to be fixed or we are going the way of Greece, Spain, etc... Taxed Enough Already? TEA Party! A tip 'o the hat to CDR Salamander for the link.