It is a similar story with the Federal Housing Administration, which has what the Wall Street Journal calls "razor thin reserves" as it goes around the country, merrily guaranteeing ever larger mortgages for ever larger numbers of people, while 14 percent of those mortgages are already delinquent.
When the FHA is finally scraping the bottom of the barrel, trying to come up with the money to redeem all the reckless-- but politically popular-- guarantees it is making, where do you think that additional money they need will come from? From taxpayers-- current and future.
But none of this money is in the official federal budget that the Congressional Budget Office sees. There are many other financial liabilities of the government that are "off-budget," which means that they do not show up in the official numbers.
What if an individual operated this way? If you are 80 years old, and your assets exactly balance your liabilities, you're in good shape, right? Wrong.
At your age, you know that there may be some big medical bills coming, somewhere down the road. If you have been following politics-- which may be bad for your blood pressure-- you know that the mountainous federal deficits that extend into the future, as far as the eye can see, are likely to set off inflation that will silently steal a big chunk of the value of whatever money you have put aside for your old age. But none of that shows up in the numbers measuring your current assets and liability.
Moreover, at 80 years of age, you are not likely to be able to resume a career and make anything like the money you once made. What can you do? Unlike the federal government, you cannot just send your official numbers over to the Congressional Budget Office and have them announce that you are in great financial shape.