By  David Martosko In Washington

PUBLISHED: 15:27 EST, 29  July 2013 |  UPDATED: 15:56 EST, 29 July 2013

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.

On the last day of 2012, the national debt clock in New Yrk City showed $16.38 trillion in debt, comign out to more than $138,000 for each U.S. family 

On the last day of 2012, the national debt clock in New  Yrk City showed $16.38 trillion in debt, comign out to more than $138,000 for  each U.S. family. Another $300 billion has been added since then, not including  the extra $70 TRILLION Hamilton identified

Hamilton's math shows that at the end of 2012, nearly $70.1 trillion (bottom, right) was owed in off-balance-sheet liabilities, in addition to the 'official' federal debts 

Hamilton’s math shows that at the end of 2012, nearly  $70.1 trillion (bottom, right) was owed in off-balance-sheet liabilities, in  addition to the ‘official’ federal debts

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. Future Medicare 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.’

Republican Speaker of the House John Boehner is seldom amused by the idea of raising the federal debt ceiling, which brought us the infamous budget 'sequester' the last time around 

Republican Speaker of the House John Boehner is seldom  amused by the idea of raising the federal debt ceiling, which brought us the  infamous budget ‘sequester’ the last time around

 

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.

Never enough credit cards: The federal government has borrowed against Americans' future tax contributions to the tune of $86.8 trillion in all 

Never enough credit cards: The federal government has  borrowed against Americans’ future tax contributions to the tune of $86.8  trillion in all

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.’

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