The treasury department recently did an internal study a while back about what the debt would be if you counted all the future obligations and revenue and discounted them ot the present. The result was an estimame of a $44 trillion debt.
This number was recently used in a Boston Globe editorial by Kotlikoff and Sachs and has gotten some attention since then as well.
There seems to be some intrigue as to the $44 trillion number – it’s been suggested that the calculation was set to go into the Budget, but then got pulled after O’Neill was fired.
The financial times has the full story as told by the primary author of the internal study, Kent Smetters. click on the link below, it’s interesting reading.
Transcript of the interview with Kent Smetters
FT: When was this study initiated and at who’s request?
KS: The work was never meant to be a Treasury study. It was meant to be some internal thinking, something for O’Neill. It was meant to be an internal part of thought process on how to reform the budget – in particular, budget accounting.
FT: What was the idea here?
KS: I’ve gotten a lot of calls about this.
FT: From who?
KS: Lots of media organisations, and I’ve just refused to talk to people in the past. I’m not sure how you got my cell phone number.
FT: You haven’t talked to anyone about this?
KS: No, I just refuse to return calls. But this Boston Globe editorial kind of let the cat out of the bag. So maybe this is a good opportunity to set the record straight.