'True US debt is about $205 trillion' - expert
He explains how the government uses accounting tricks to hide the truth and keep everyone in the dark about the US’s actual debt-load, which runs $205 trillion versus the $17 trillion you often here in the news.
"The liabilities the government owes are mostly off the books. We have a true debt picture which is about $205 trillion. This is recording all the future obligations the government has, whether they are official obligations or not, such as paying for your social security benefits, mine, or your mother’s Medicare benefits, defense spending, etc. All of these things are really obligations that aren’t recorded on the books as debt, whereas paying off future principal and interest payments on Treasury bills and bonds are recorded. So, anyway, if you take the value of all of those commitments and subtract all the taxes coming to pay those commitments, the difference is what’s called the fiscal gap; and that fiscal gap in the US is now $205 trillion. So, the true debt is $205 trillion; the official debt is only $17 trillion," - said Dr Kotlikoff.
The CBO publishes its projections they use something called the extended baseline forecast. They also have something called the alternative fiscal scenario, which is basically more realistic. This year they reported only the extended baseline forecast.
"Everybody should be calling the CBO and asking why they’re doing this. This is a pattern, you know. The Clinton administration—we put out the fiscal gap studies for a couple of years on the President’s budget. The Clinton administration then censored it. The guys who’s now head of the National Economic Council, the Chief Economic Advisor to President Obama, was the one who did the censorship back in 1994. President Bush’s Treasury Secretary O’Neil wanted us to do a fiscal gap accounting for the President’s budget in 2003 and he was fired in December 7, 2002, and that study was censored two days after he was fired. So, this is not accidental. This is more or less a conspiracy to hide the truth to keep ourselves and our kids in the dark about what the politicians are really doing," - said said Dr Kotlikoff.
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