National debt is larger, more subtle than thought
Letter

Agamitsudo / Wikimedia Commons

National Debt Clock in New York, New York on Mar. 4, 2011.

In his scholarly "A Short Primer on the National Debt" (op-ed, Aug. 29), John Steele Gordon gets most things right. Unfortunately, he (like many others) understates by a huge amount, the total federal government debt. To his proposed total of $14.6 trillion, to get to the real government debt, you have to add the federal "agency" debt of another $7.5 trillion, bringing the real total to $22.1 trillion. For this additional $7.5 trillion, the majority of which is the debt of Fannie Mae and Freddie Mac, the government is fully on the hook and cannot wriggle off without default. Agency debt, which over the last 40 years has grown from a relatively minor to a vast amount, was able to inflate so much because it is kept off the government's official books—hardly forthright bookkeeping. But although behind an accounting curtain, it is inescapably there and the taxpayers are committed to paying it. So, it's $22.1 trillion, even if we do not count, in agreement with Mr. Gordon, the unfunded "promises" of Social Security and Medicare.

Alex J. Pollock is a resident fellow at AEI.

Also Visit
AEIdeas Blog The American Magazine
About the Author

 

Alex J.
Pollock

What's new on AEI

AEI Election Watch 2014: What will happen and why it matters
image A nation divided by marriage
image Teaching reform
image Socialist party pushing $20 minimum wage defends $13-an-hour job listing
AEI on Facebook
Events Calendar
  • 20
    MON
  • 21
    TUE
  • 22
    WED
  • 23
    THU
  • 24
    FRI
Monday, October 20, 2014 | 2:00 p.m. – 3:30 p.m.
Warfare beneath the waves: The undersea domain in Asia

We welcome you to join us for a panel discussion of the undersea military competition occurring in Asia and what it means for the United States and its allies.

Tuesday, October 21, 2014 | 8:30 a.m. – 10:00 a.m.
AEI Election Watch 2014: What will happen and why it matters

AEI’s Election Watch is back! Please join us for two sessions of the longest-running election program in Washington, DC. 

Event Registration is Closed
Wednesday, October 22, 2014 | 1:00 p.m. – 2:30 p.m.
What now for the Common Core?

We welcome you to join us at AEI for a discussion of what’s next for the Common Core.

Thursday, October 23, 2014 | 10:00 a.m. – 11:00 a.m.
Brazil’s presidential election: Real challenges, real choices

Please join AEI for a discussion examining each candidate’s platform and prospects for victory and the impact that a possible shift toward free-market policies in Brazil might have on South America as a whole.

No events scheduled this day.
No events scheduled this day.
No events scheduled this day.
No events scheduled this day.