Scott Burns at MSN Money (htp: Michael Panzner) calculates that unfunded government programs for social security and Medicare ($46 trillion) represent a debt equivalent to around 90% of all consumers' net worth ($51.5 trillion). If Americans' net assets decline by a further 10%, then effectively the American citizen is bust.Can anyone provide equivalent information for the UK?
Your statement is silly. The Medicare commitments include future obligations while the net assets do not.
ReplyDeleteOn this basis many individuals with a mortgage are bust - since the value of the future payments principal and interest will probably exceed the current value of their net assets.
Of course Dan Hannan in his YouTube demagogery made a similar claim that the country as a whole was in negative equity. It is amazing how many people, including most political journalists, do not really understand the difference between stocks and flows.
ReplyDeleteYou mean, Scott Burns' (financial statement is silly. And presumably, you also think David Walker, the former US Comptroller General, is silly, since he's spent 2 years touring America to warn of exactly the same thing. I understand the figures to represent the discounted future value of the obligations concerned, much in the same way as one produces a quotation for an annuity.
ReplyDeleteI can't provide that data but I'll check here to see if anyone can.
ReplyDeleteGrateful if you could, James. What's that horrid baby doing as your avatar?
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