This is the Cato Daily Podcast for May 28th, 2008. I'm Caleb Brown. The federal

government is not only spending more now, it's also pledging to spend more down the

road. In 2007 alone, the federal government increased its total obligations by 2.5 trillion dollars.

That's not spending that shows up on current books, but it is spending that we promise

and our kids will have to confront.

Chris Edwards, the Director of Tax Policy Studies at the Cato Institute, comments.

The federal government's long-term financial obligations grew by $2.5 trillion last year, a reflection of the

mushrooming cost of Medicare and Social Security benefits as more baby boomers reach retirement.

When you hear discussions about the federal deficit, this kind of number is nowhere

to be found.

That's right.

The federal budget deficit, the annual amount of red ink that the federal government is running is in the range of $400 billion a year.

But if you look at the long-term unfunded obligations of the federal government, we are talking tens of trillions of dollars.

And kudos to USA Today for running a story the other day that showed that taxpayers may be on the

hook for 57 trillion dollars of unfunded

federal promises in benefit programs. Now a lot of these are social insurance or

Medicare these are programs that we can predict pretty well, reasonably, how much

they're going to cost out into the future.

Well, we can't predict is the kinds of revenues that are going to come in to pay them.

States recently under new government accounting rules have been required to recognize

the future costs of their pension obligations for their state workers and

health insurance programs for their state workers. Does the federal

...