By DAVID MARTOSKO - IN WASHINGTON
The U.S. government's books are in the red by more than $86.8trillion, according to an influential University of California San Diego economist.
That's a number more than five times as large as the figure acknowledged by the U.S. Treasury and used by government agencies to justify their budgets and spending.
Officially, the debt stands at $16.7trillion, including nearly $12million in debt held by the public in the form of Treasury Bonds, wrote James Hamilton in a working paper for the National Bureau of Economic Research.
But that number doesn't include several 'off-balance sheet' obligations including $54.1trillion in missing funding for Medicare and Social Security, along with support for federal housing, loan guarantees, savings deposit insurance and the cost of actions taken by the Federal Reserve.
'The biggest items in this category come from Social Security and Medicare which, if current policy is maintained, will require enormous sacrifices from future taxpayers,' Hamilton wrote.
Future commitments for Social Security - whose misnamed 'trust fund' is actually empty - will cost the government $26.5trillion in today's dollars when beneficiaries start cashing in their benefits. FutureMedicare commitments account for another $27.6trillion.
'These numbers are so huge it is hard even to discuss them in a coherent way,' argues Hamilton.
'[A]lthough one can quarrel with the specific numbers, there is an undeniable important reality that they reflect -- the U.S. population is aging, and an aging population means fewer people paying in and more people expecting benefits. This reality is unambiguously going to be a key constraint on the sustainability of fiscal policy for the United States.'
Conservative groups are leaping up to point out the apocalyptic nature of the new numbers.
'If we don't do something to get a handle on these unfunded liabilities, the result will be complete economic decay and catastrophe,' Club for Growth Spokesman Barney Keller told MailOnline.
Keller said it's 'important for America to reform entitlements by doing things like converting Medicare into a voucher system or reforming Social Security by offering private accounts for younger workers.'
The Obama administration and its Democratic allies in Congress have historically opposed Social Security and Medicare reform efforts, treating entitlements as a 'third rail' that could politically incapacitate anyone who tries to touch them.
'We will not negotiate over Congress’s responsibility to pay the bills that Congress ran up,' White House press secretary Jay Carney told Bloomberg last week.
Boehner had said House Republicans are 'not going to raise the debt ceiling without real cuts in spending.'
The annual congressional squabbles over raising the debt ceiling limit only apply to the $16.7trillion number, not to off-balance-sheet amounts.
That figure, dwarfed by Hamilton's estimate, also includes sol-called 'IOUs' from the Medicare and Social Security trust funds, whose money Congress generally spends every year instead of setting it aside to pay for future benefits.
Hamilton blogs about economics, and wrote about his paper earlier this month, noting that government-held mortgages and housing loan guarantees add trillions more to the financial burden that will be carried by future taxpayers.
'As of the end of 2012,' he noted, 'the outstanding debt and guarantees issued by Fannie and Freddie (along with those of the Federal Financing Bank, Federal Home Loan Banks, Farm Credit System, Federal Agricultural Mortgage Corporation, FICO, and REFCORP) came to $7.5trillion.
That number alone is nearly two-thirds as much as the $12trillion in federal debt held by the public.
In the working paper, Hamilton explains that these commitments gave the federal government a 'huge' level of 'involvement in the housing boom and bust of the last decade.'
Dan Holler, communications director at Heritage Action, told MailOnline that Hamilton's report 'destroys the notion that Washington can continue to ignore America’s pressing fiscal situation.'
'Congress is notoriously slow to act,' he vented, 'but at the very least it makes clear that raising taxes and praying for economic growth is not a solution. It should also increase the sense of urgency to reform America’s mortgage finance system, which is currently dominated by taxpayer-backed Fannie Mae and Freddie Mac.'