According to the Social Security and Medicare Boards of Trustees’ 2023 reports, Medicare and Social Security now exceed $78 trillion in long‐term unfunded obligations. This equates to an obligation of more than $600,000 for every U.S. household. That’s three times all the goods and services produced in the United States last year, as measured by gross domestic product (GDP).Each year the Social Security and Medicare Boards of Trustees prepare 75‐year estimates assessing the programs’ long‐term financial conditions. While such long‐range estimates are inherently uncertain, these projections provide important information about the direction and magnitude of entitlement spending and revenues. The unfunded obligation represents the amount of money U.S. taxpayers would need to set aside today to cover the deficits Medicare and Social Security will incur over the next 75 years.Most governmental and media coverage focuses on the trust funds’ health. This is misguided because the Medicare and Social Security trust funds are no such thing. Neither Medicare’s nor Social Security’s trust fund holds any real assets beyond IOUs against future U.S. taxpayers. Special‐issue Treasury bonds credited as assets to these trust funds don’t make paying obligations possible. They merely grant Treasury the authority to issue government debt to cover the difference between payroll tax revenues and obligated spending. Instead, this blog will focus on the overall financial burden imposed by excess spending growth from Medicare and Social Security.
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