Financial experts are sounding the alarm over the federal government’s practices, warning that the true scope of U.S. liabilities far exceeds what is publicly reported.
Economists and fiscal policy analysts spoke at Truth in Accounting’s Citizen-Heroes Conference and stressed the need for increased transparency and accountability in federal accounting.
The existing U.S.-published national debt, which consists of debt held by the public and intragovernmental holdings, including debt held by Social Security and Medicare trust funds, is reported at $36 trillion.
The national debt grew by $2.5 trillion in fiscal year 2024 alone, reaching $36.3 trillion, The Center Square reported.
David Walker, former U.S. Comptroller General, noted that official figures fail to account for trillions in unfunded obligations.
Truth in Accounting, a nonpartisan non-profit focusing on government accountability and transparency, says that the true numbers are between $100 trillion and $200 trillion.
According to the organization, the national debt share for each taxpayer is nearly one million.
Walker said that the federal government has grown significantly, promising too much and subsidizing too many, lost control of its budget, undercut states’ rights, and must restructure its finances in order to create a better future. He reiterated that the current fiscal and monetary policies are unsustainable.
“Better planning, transparency, accountability, and results orientation, combined with citizen education and engagement, are essential elements to achieving the needed transformational change,” he signed.
He continued that failing to act would have severe adverse consequences for America and most Americans, noting the new Department of Government Efficiency is needed, but not enough.
The suggested federal financial reporting changes include the following:
Adopt a dual “bottom line” balance sheet that provides additional transparency regarding our huge unfunded social insurance obligations.Show intra-governmental debt obligation as a liability on the balance sheet.Eliminate weapons systems and munitions from the balance sheet.Provide additional disclosures regarding weapons systems.Provide additional disclosures regarding federal property.
“We need more action and less rhetoric,” Walker said.
“The only way we can get to a new policy that achieves 8% of GDP in savings is to change the conversation,” said economist and author Lawrence Kotlikoff. “We have to think about major radical reforms.”
President Joe Biden recently signed the bipartisan Social Security Fairness Act, which increases payouts to retired public sector workers and raises the national debt by at least $196 billion.
A report by the National Taxpayers Union Foundation, a fiscal advocacy organization, said that this will also speed up Social Security’s insolvency, projected to occur in 2035, by six months.
“Congress and the presidents have promised people benefits, and they have no idea where they’re going to get the funds to pay for those benefits,” said Sheila Weinberg, founder and executive director of Truth and Accounting.
She continued that accrued benefits, such as Social Security and Medicare, should be recorded as liabilities on the federal balance sheet.
According to Andy Miller, a former CPA, Social Security will be depleted by 2033, while Medicare will be depleted by 2039.
“The bottom line is the federal government system accounting is just wholly inadequate,” said Miller, continuing that reporting total obligations may provide “political coverage” for Congress to enact the changes these programs need to continue.
Former congressman Joe DioGuardi, founder of Truth in Government, a public watchdog organization, suggested that the federal government’s financial reporting remains a contentious issue; without greater accountability, the nation’s economy may be at risk.
