Joe Carvin is the founder of One World. His time spent as Town Supervisor for the Town of Rye and three-decade long career in emerging market finance, his ability to speak 5 languages fluently, and being a father have influenced his passion for global citizenship education. Joe also holds graduate degrees from the Harvard Kennedy School of Government (MPA) and New York University (MBA).
The primary purpose of our Citizen-Heroes event and ongoing efforts is to make clear to the general public that the actual financial obligations of the US Federal government are far greater than is generally understood, primarily because the US Federal government has worked hard via FASAB to hide the actual financial obligations of the U.S. Federal Government.
Our goal with this effort is two-fold:
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Make clear the actual financial burden of the U.S. Federal Government. To that end, we include below analyses of that burden as measured by accountants and economists.
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Encourage DOGE to encourage FASAB to adopt a “double bottom line” that makes clear for all to see the actual financial obligations of the U.S. Federal government.
As you will see below, our Citizen Heroes put forward different methodologies to measure the actual level of financial burden, however, they all agree that financial burden is far worse than is generally reported and as such needs to be rectified by FASAB.
As you will see below, our panelists put the financial obligations hidden from the public by FASAB’s decision not to apply accrual accounting to U.S. social insurance programs from $118 trillion to about $200 trillion.
The Different Accounting Perspectives
Perspective from a former Comptroller General
Mr. David Walker, who served as Comptroller General of the United States for ten years, calls for a “double bottom line” where the U.S. Federal government's financial debt and full liabilities are reported. As you will if you read Mr. Walker’s testimony, he puts a very high probability on domestic and global debt crisis if we do not act to change course:
“Now that the elections are over, we need to focus on how to put our nation’s finances in order to avoid a domestic and global debt crisis. I recently authored an article for International Economics Magazine at their request. In that article, I put the possibility of such a debt crisis at 70% within the next 3-5 years if we do not change course. My colleague on the Federal Fiscal Sustainability Foundation Board, Professor Steven Hanke of Johns Hopkins University, who is an internationally acclaimed economist, believes it is higher than 70%.”
David Walker has clarified that the actual financial burden of the U.S. federal government is far greater than generally reported. In his recent testimony before Congress, he explained that:
“Total federal liabilities and unfunded social obligations now exceed $125 trillion and are growing faster than the economy.”
Please click this link for his full testimony: https://budget.house.gov/imo/media/doc/david_walker_statement1.pdf
Perspective from a mission-driven non-partisan accounting reform organization
Shelia Weinberg, CPA and founder of Truth in Accounting, puts the real financial liabilities at $153.9 trillion as you can see via this link to her analysis: https://www.truthinaccounting.org/news/detail/financial-state-of-the-union-2024
Ms. Weinberg calculates that every US taxpayer’s share of these liabilities is just under $1 million at $980,000 per taxpayer. The Truth in Accounting methodology is explained here.
Perspective from an Economist
Laurence Kotlikoff, a renowned economist and economics professor at Boston University, emphasizes another critical measure: the fiscal gap. This metric compares the value of all government outlays, under current law, over an infinite horizon to all receipts. The fiscal gap is shockingly large, representing about 8% of GDP on an ongoing basis.
To stabilize this burden—imposed on both today’s and tomorrow’s generations—we would need to immediately and permanently raise taxes by 45% across the board. Alternatively, we would need to cut total federal outlays immediately and permanently by about 33%.
Dr. Kotlikoff’s fiscal gap accounting would put total US liabilities and unfunded obligations at over $200 trillion, a number that legendary stock market investor Stan Druckenmiller uses when discussing this issue as we can see below. Stated differently, the U.S. is short 8 percent of GDP in taxes net of spending on an ongoing basis. Delaying fiscal adjustment simply raises the 8 percent figure, reducing the burden on older generations and increasing it on younger and future generations. This is irresponsible, unethical, and immoral!
Perspective from a former Congressman Joe DioGuardi
Joe DioGuardi was one of the first CPA’s to serve in Congress. He has been addressing the financial and accounting standards of the federal government since being elected, eventually leading to the CFO Act of 1990.
The CFO Act Twenty Five Years Later
Perspective from other credible accounting data points
Legendary Wall Street investor Stan Druckenmiller who generated annual returns for several decades of over 30% per annum puts the number even higher at “$200 trillion with a “t” in this YouTube video which you can access here: Drukenmiller on US Federal Debt
Mr. Druckenmiller introduces another measure in this talk called the fiscal gap. Mr. Druckenmiller explains that to maintain our current level of safety net, to keep the same level of benefits promised today into the future, we would either need to increase taxes by 40% or cut spending by 35% today and forever, for every day into the future into perpetuity.
Open the Books: 175.3 trillion
Open the Books, another US nonprofit dedicated to government financial transparency estimates that the US federal government's unfunded Social Security and Medicare liabilities are $175.3 trillion.
In this article, they explain their methodology, which outlines the kinds of decisions accountants will eventually need to make when they finally adopt best-practice accrual accounting methods.
They explain that using a 75-year time horizon, the projected benefits paid out of $215.7 trillion exceed estimated collections of $137.4 trillion by $78.4 trillion, leaving taxpayers with a $78.4 trillion funding gap that needs to be filled if the government intends to keep its promises regarding Medicare and Social Security.
In their analysis, they point out that an infinite time horizon is a better and more accurate way to evaluate this gap, which brings the funding gap to $105.4 trillion. They also believe that including “future participants” in the analysis is essential, adding another $69.9 trillion, which will bring the grand total to $175.3 trillion.
If the methodologies of Open the Books were applied, the total U.S. financial liabilities would be $211.4 trillion.
Conference and Citizen Hero Movement Goals
The goal of the conference and our ongoing efforts is not to come up with a specific number. The goal is to make clear to the American people that the problem is far more significant than they understand and is getting worse and that without a fundamental change in the near term, we are likely headed to a full-blown debt crisis.
Therefore, we recommend that DOGE encourage FASAB to urgently adopt best practice accrual accounting methods so that we can have a coherent exchange of ideas on how to address this existential challenge to our nation’s well-being. Sign our petition for reform today.