Economist Presents Scary US Debt Number: $70T

If you're worried about our country's fiscal health, you may want to stop reading. A UC San Diego economics professor sees a problem area we're overlooking: "the growth of federal liabilities that are not included in the officially reported numbers." James Hamilton did the math, and claims that these off-balance-sheet federal liabilities totaled $70.1 trillion as of last year; that's six times the $11.9 trillion in US debt held by the public (ie, the reported on-balance-sheet debt), according to the Treasury Department. Here's Hamilton's breakdown of unfunded liabilities, per the San Diego Union-Tribune and the Washington Examiner:

• Medicare obligations to future retirees, $27.6 trillion
• Social Security obligations to future retirees, $26.5 trillion
• Fannie Mae, Freddie Mac, FHA, and other housing commitments: $7.5 trillion
• FDIC-insured bank deposits: $7.6 trillion
• Other government trust fund obligations: $1.8 trillion
• Student loan program liabilities: $325 billion
• (Hamilton also factors in a reduction in that liability to get to $70.1 trillion; he explains it here.)

Hamilton acknowledges that "these off-balance-sheet concerns may or may not translate into significant on-balance-sheet problems," but that doesn't change the fact that "they are huge. And implicit or explicit commitments of such a huge size have the potential to have huge economic consequences, perhaps for the better, perhaps for the worse."