Medicare’s $90 Trillion Unfunded Liability

According to Michael D. Tanner of the Cato Institute, Medicare's future unfunded liabilities could be as much as $90 trillion (yes that's trillion with a T). For perspective, $90 trillion is greater than worldwide GDP for 2011.

From Tanner's article:

Let's try to put the ongoing debate over the future of Medicare into a little bit of context. Last year, Americans paid $274 billion in Medicare taxes and premiums. At the same time, the program paid out $564 billion in benefits. That amounts to a shortfall of roughly $290 billion. Looking into the future, even the most optimistic estimate by the program's trustees puts Medicare's future unfunded liabilities at more than $38.6 trillion. More realistic projections suggest the shortfall could easily top $90 trillion.

With such astronomical unfunded Medicare liabilities, don't be surprised if politicians start debating whether or not to increase the Medicare tax rate (1.45% for 2012) in the not so distant future.