We recently updated the assumptions underlying Truth in Accounting’s debt clock.
In April 2019, after the Financial Report of the U.S. government was issued, the Social Security and Medicare trustees released their annual reports on the condition of those programs. These new reports compelled us to update our debt clock, and increase our estimate of the true national debt.
We increased our calculation of the true national debt by $10 trillion to $117 trillion. The majority of the increase was due to the Medicare actuaries projecting faster spending growth for physician-administered drugs and slower assumed growth of economy-wide productivity.
Our debt clock includes the assets and liabilities reported on the latest Financial Report of the U.S. Government issued in March of this year for the government’s latest fiscal year (which ended September 30, 2018). It also includes the massive debts in social insurance programs (Social Security and Medicare) that the government chooses to exclude from its balance sheet.
Medicare actuaries have two different ways of making debt estimates. The first uses current law to calculate the unfunded Medicare promises; the second is called the “Illustrative Alternative Scenario (IAS).” We use the IAS in our estimates, because it incorporates more realistic assumptions about future payments to Medicare physicians.