What is your share of the national debt today?

Before we start throwing numerous trillions of dollars at national health care, cap-and-trade and additional “stimulus” spending, prudent Americans might ask: What has already been charged to the national credit card?

The national debt is $11,579,428,713,952. The national debt is a cumulative number that represents annual federal budget deficits in excess of annual budget surpluses over the years. It has been financed through the sale of treasury bonds and notes that are outstanding and have not yet been repaid. As the population of the country is currently about 300 million, this amounts to approximately $38,000 per American man, woman and child as of today.

Implicit federal debt is the present value of unfunded future liabilities for Social Security and Medicare and Medicaid. In other words, it is the current value of those future obligations that have been promised by politicians in excess of payroll taxes to fund them. As of March 2008, the Government Accounting Office put this number at $41 trillion. The number has grown substantially since then. Generally accepted accounting principles (GAAP) require private companies to book such future liabilities and to adequately prefund them.

Not surprisingly, the federal government exempts itself from GAAP accounting. While the mainstream media yawned, David Walker, ex-Comptroller of the Currency during the Clinton and Bush administrations, has done yeomen’s work trying to bring this to the attention of the public. When adding the implicit debt to the national debt, each man, woman and child in the country currently is on the hook for approximately $180,000 (and you thought you ran up the Visa and MasterCard!).

What do governments that have run up enormous, irresponsible levels of debt need to do to rectify the problem? The same thing individuals who have done the same need to do: increase revenues, cut spending or declare bankruptcy. As of March 2008, the Government Accounting Office and Mr. Walker had characterized this federal fiscal policy as unsustainable. The GAO report noted that federal spending would have to be cut by 60 percent or federal taxes would have to be doubled.

Neither of these are feasible alternatives. Declaring bankruptcy on the national debt would be equally destructive. The report’s opinion was that only substantial economic growth coupled with GAAP-type accounting and writing Social Security and Medicare benefits down will do the trick.

It is hard to see a rosy scenario when focusing on enhancing federal revenues and/or cutting federal spending under the current administration and Congress. As I tried to note in a recent newspaper article, raising income tax rates on the rich would very much harm, not enhance, the production of federal revenues, particularly if imposed during an economic recession. Harvard Economist Greg Mankiw estimates that if the administration is able to jettison the Bush tax cuts and increase Social Security taxes on upper-income individuals, it will drive marginal rates on this group from the current combined 37.5 percent income and payroll rate to 50 percent.

Adding state and municipal income tax on top of that would cause previously productive upper-income entrepreneurs to net far less than half after tax. This level of wealth confiscation will act as a complete disincentive to create more and new wealth. Revenues and jobs will suffer. People counting on “green” jobs to enhance the macro-economy are in for a rude awakening. The empirical evidence notes that the Spanish government’s efforts in creating and subsidizing green jobs cost far more jobs than were produced.

On the spending side, you may have heard recently that the budget deficit for the Federal government’s next fiscal year will run a deficit of $1.8 trillion for that year alone. This is four times the size of any previous annual budget deficit.

So before encouraging your representatives in Washington to go on a new and even greater spending spree, I thought it would be a good idea to let you know what those jackasses have already charged on the national credit card and what your share of it is.

Mark P. Altieri is an associate professor of accounting at Kent State University and guest columnist for the Daily Kent Stater.