National debt of the United States: Difference between revisions

 

===Accounting treatment===

[[File:U.S. Intragovernmental debt - v1.png|thumb|U.S. intra-governmental debt components, which totaled $5.47 trillion as of September 2016. This debt mainly represents obligations to Social Security recipients and retired federal government employees, including military.]]

Only debt held by the public is reported as a liability on the consolidated financial statements of the United States government. Debt held by US government accounts is an asset to those accounts but a liability to the Treasury; they offset each other in the consolidated financial statements.<ref>{{cite web|url=http://www.gao.gov/special.pubs/longterm/debt/debtbasics.html#difference|title=Federal debt basics – What is the difference between the two types of federal debt?|publisher=[[Government Accountability Office]]|access-date=April 28, 2012|archive-date=July 6, 2011|archive-url=https://web.archive.org/web/20110706055255/http://www.gao.gov/special.pubs/longterm/debt/debtbasics.html#difference|url-status=dead}}</ref> Government receipts and expenditures are normally presented on a [[Basis of accounting|cash]] rather than an [[accrual]] basis, although the accrual basis may provide more information on the longer-term implications of the government's annual operations.<ref>{{cite web|url=http://www.gao.gov/special.pubs/longterm/deficit|title=Measuring the Deficit: Cash vs. Accrual|publisher=[[Government Accountability Office]]|access-date=January 19, 2011}}</ref> The United States public debt is often expressed as a ratio of public debt to GDP. The ratio of debt to GDP may decrease as a result of a government surplus as well as from growth of GDP and inflation.{{citation needed|date=September 2016}}

 

=== Unfunded obligations excluded ===

The U.S. federal government is obligated under current law to make mandatory payments for programs such as [[Medicare (United States)|Medicare]], [[Medicaid]] and Social Security. The [[Government Accountability Office]] (GAO) projects that payouts for these programs will significantly exceed tax revenues over the next 75 years. The Medicare Part A (hospital insurance) payouts already exceed program tax revenues, and social security payouts exceeded payroll taxes in fiscal year 2010. These deficits require funding from other tax sources or borrowing.<ref name="GAOCitiz" /> The present value of these deficits or unfunded obligations is an estimated $45.8&nbsp;trillion. This is the amount that would have had to be set aside in 2009 in order to pay for the unfunded obligations which, under current law, will have to be raised by the government in the future. Approximately $7.7&nbsp;trillion relates to Social Security, while $38.2&nbsp;trillion relates to Medicare and Medicaid. In other words, health care programs will require nearly five times more funding than Social Security. Adding this to the national debt and other federal obligations would bring total obligations to nearly $62&nbsp;trillion.<ref>Peter G. Peterson Foundation (April 2010). [http://www.pgpf.org/Special-Topics/Download-the-Citizens-Guide.aspx "Citizen's guide 2010: Figure 10 p. 16"]. Peter G. Peterson Foundation website; retrieved February 5, 2011.</ref> However, these unfunded obligations are not counted in the national debt, as shown in monthly Treasury reports of the national debt.<ref>{{cite web |title=Government – Debt Position and Activity Report |url=https://www.treasurydirect.gov/govt/reports/pd/pd_debtposactrpt.htm |website=[[TreasuryDirect]]}}</ref>