Publish every promise of future payment, including hidden debts, in one set of government books
Steps to make it happen
- The government lists not only the money it has borrowed but also all the money it has promised to pay later.
- The list also includes promises to pay back a company's debts and payment contracts for long building projects.
- Experts estimate how large the promises are that must be paid for decades, such as pensions.
- A team of experts outside the government checks whether these numbers are correct.
- Every year, the government puts the numbers in clear charts that anyone can see and posts them on the internet.
- Before making a new promise, the government first shows everyone how much it will add to the books.
- Everyone knowing the true size of the country's debt becomes the normal thing.
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The proposal in detail
This proposal asks that government financial reports list, in one place, the future payment duties that tend to be kept off the books, in addition to ordinary loans and government bonds, which are IOUs issued by the state. It covers not only the central government but also local governments, public enterprises that the government effectively controls, and public funds. The items to be listed include government guarantees for the debts of private companies and banks, contracts in which private firms build roads, hospitals and the like and are paid over a long period, pensions and retirement pay for public employees, the expected amount of future benefits promised by law, and costs that are likely to be paid because of disasters or lawsuits. Debts that are certain are separated from debts that arise only if certain conditions are met, and for the latter an estimate of how likely they are is attached. The financial authorities prepare the numbers, but an audit body independent of the government and expert fiscal institutions check the assumptions and calculations, and their opinions are attached and published without changes. Because the expected amount of future benefits changes greatly depending on assumptions about interest rates and population, showing a range based on several assumptions is required. Contracts that truly cannot be made public for security reasons are an exception, but the number of such contracts and a rough total must be shown, and the details are disclosed to a limited committee of the legislature. A bill to make a new guarantee or long-term contract must come with an estimate of how much it would add to the books.
BenefitsThe real burden becomes visible, and the temptation to delay is weaker
When even hidden payment promises are lined up in one set of books, lawmakers and citizens can discuss how much burden the government is passing to the future, using the same numbers. Guarantees and long-term contracts are easy to sign carelessly because no money leaves at that moment, but if the numbers in the books grow and are published each time one is signed, there is a reason to think carefully about whether the promise is truly needed. Spotting the seeds of a crisis early is also important. If people know in advance about imbalances, such as guarantees to one public enterprise swelling or contract payments piling up in one year, they can act while there is still room, instead of scrambling after a crisis hits. For lenders too, a government that honestly puts out its information is easier to trust, and over the long run the terms of its borrowing can be expected to become more stable. If standards are aligned between countries, international comparison also becomes easier, and it gives a way to bring the interests of future generations, who cannot speak up in decisions, into today's debate.
DrawbacksUncertain numbers may take on a life of their own and restrict needed spending
The expected amounts of pensions and other future benefits are very uncertain numbers that can swing several times over with a small change in assumptions about interest rates, population and economic growth. If they are lined up in the same books as debt, an enormous total alone may take on a life of its own in the news and in politics, and be used to argue that because the debt is huge, social security and public investment should be cut. This is exactly what people on the opposing side worry about most: by treating benefit promises, whose timing and methods can be adjusted, the same as debts that must be repaid right away, spending that supports people in weak positions would be unfairly squeezed. Accurate estimates also need skilled staff and a great deal of work, which is a heavy burden for countries with limited administrative capacity. Exposing every weakness could stir up fear in the markets and make borrowing terms worse. Moreover, even if the range of what goes in the books is made strict, it cannot be ruled out that governments would simply devise new forms of promises that do not appear and look for loopholes.
Learn the background
In many countries, the number reported as public debt is mostly the balance of money the government borrowed directly. In reality, however, there are many payment promises that rarely show up in the books: the government guarantees the debts of public enterprises, signs contracts to keep paying for decades for facilities that private firms built, and promises pensions and other benefits by law. Such hidden debts can suddenly come to light when the economy worsens or a company fails, and they can push public finances into trouble all at once. In the past, countries whose official debt looked small have fallen into serious fiscal crises around the world, because they had to rescue banks they had guaranteed or because hidden borrowing was discovered. When debt is managed only by its visible part, politicians are tempted to push burdens into the future in forms that are hard to see, such as guarantees and long-term contracts. The ones who pay the bill are future taxpayers, who took no part in the decision. International organizations also call for more transparency, but what is listed and how far it goes still differs from country to country.
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This proposal was written in Japanese by AI (claude-opus-5-5, policy version 2026-10-15d) and translated by AI (claude-sonnet-5-5). Nobody has checked the facts. Read the original (日本語) How the AI writes