>> That isn't current debt, but future obligations.
It is neither. It has been conveniently defined as an "obligation" rather than as a "debt", because were it a debt it would have to be considered as part of the NATIONAL debt, and no one -- R or D, wants to do that. But it is, in every since of the word, a "debt". What we don't know with precision is the amount of it because there are various ways of counting it.
The more important point, however, is that is is NOT a "future" obligation. Technically, it is a currently unfunded liability for past service costs -- people have been promised benefits and for us to be able to pay those benefits we would need those trillions on deposit TODAY so that they could grow into the amount we actually need. It is more like an extremely complex "simple annuity" ("simple" being a technical term, not a descriptive one) -- where one deposits a sum certain now in order to be able to withdraw sufficiently large amounts in the future to meet the obligations as they come due.
If you wait a year to make the deposit, the amount goes up. If you wait ten years the amount goes WAY up. It is not, as you've said, a "future" obligation. It is the amount which must be deposited now such that the accumulated earnings on that amount will enable us to meet the obligations as they come due.
Now, it is possible Congress will change the law, forcing millions of elderly to live in even worse poverty, but so far, there has been little interest in doing so.
>> Given that a country has taxing authority, it does have ways to pay those obligations when they come due.
While it has the ability to demand taxes be paid, there is not a de facto ability to collect the additional taxes that would be required to fund these programs while maintaining the other commitments the government has made using the taxpayers money -- i.e., current program payments, military, debt service, Obamacare, etc. If the government were to impose such taxes, the economy would collapse overnight because the rates would be so punitive people would simply stop working; in short, we would be on the other side of Laffer's parabolic curve, where revenue would be severely reduced, not increased, as a result of tax increases.
We are between a rock and a hard place on these liberal programs, and the only real way out of it is privatization. |
