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What's In and Out of the Federal Debt

As the political season narrows down to the actual two man fight for the White House, the size of our federal debt will become a bigger and bigger issue.

Far be it for me to suggest politicians may distort some numbers, but, well, they might. And for a variety of reasons (time, space constraints, ignorance) press coverage sometimes overlooks the opportunity to keep them honest about the entire debt picture.

So here’s a quick primer, courtesy of some calculations from the Institute for Truth in Accounting.

Our REPORTED federal debt is $15.5 trillion. That includes $10.8 trillion in public debt…money used to run basic government operations … and $5 trillion in trust fund debt for things like highway work and airports.

The $15.5 trillion number is what gets thrown around most in political debate and coverage.

But there is a bunch of government spending commitments NOT included in that $15.5 trillion number. These include almost $6 trillion in expected retirement benefits for federal employees and veterans, $8 trillion in Social Security benefits that will come due, and the biggie…. $37 trillion in Medicare benefits.

Thanks to various government accounting rules, these numbers don’t get included in the main number until they actually come due. It strikes me that's a little like only counting your car payment, rather than the whole car loan, as your debt load. But better minds than I come up with these rules.

Check out the chart:

Altogether these obligation numbers come to about $63 trillion on the federal debt credit card. That’s a pretty hefty outstanding balance. Hard to believe it gets overlooked.

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Allen Wastler is managing editor of CNBC.com. You can catch his commentary on CNBC Radio. And check out his fiction.