© Sputnik / Eduard Pesov
/ The $34 trillion US debt is just the tip of the iceberg – unfunded obligations make the insolvency crisis far worse, Marc Ostwald, chief economist at ADM Investor Services International, told Sputnik.
The unfunded liabilities—over $100 trillion—from Medicare and Social Security don't show up on traditional debt balance sheets, but they are very real long-term obligations, he emphasized, noting: “No one wants to talk about it in political circles, because the problem is so large and no one has a clue how to resolve it.”
Unsustainable pay-as-you-go
There is no pool of funds for these programs, as payments going into them by workers are used to pay out the benefits for retirees, Action Economics Principal Director Michael R. Englund explains. In the past, this system worked because:
There were more workers per retiree.
People didn’t live as long.
The population was younger overall.
Changed demographics mean this imbalance is creating a structural deficit feeding into the broader insolvency threat.
Since then-President George W. Bush’s aborted attempt in 2001, no major reforms have been attempted, Englund noted. “Democrats want to increase the tax payments and Republicans want to delay the retirement age, and neither side is willing to budge,” he said. Unless there is new legislation to trim costs and/or raise revenues, this gridlock sets the stage for a future full-blown fiscal crisis sometime within 10-20 years, Englund summed up.
https://sputnikglobe.com/20250610/how-100t-debt-time-bomb-fuels-americas-looming-fiscal-crisis-1122225021.html
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