The Congressional Budget Office released a new report this week showing that the federal government’s publicly held debt would top 101% of GDP by 2021, more than the value of everything produced in this country over the course of a year. Think of it like owing more on your credit cards than your entire family income. By 2035, the publicly held debt, CBO says, could top an almost unfathomable 190% of GDP.

And that was the good news.

The federal government actually has three different types of debt. Debt held by the public, which generated the headlines in the CBO report, is the type of government bonds that you — or the Chinese government — might own. Economists worry a lot about this type of debt because the government has to borrow the money from private credit markets. The government borrowing competes with investment in the nongovernmental sector, leaving less money available for private investment in such things as factories and equipment, research and development, housing, and so on. Growing levels of publicly held debt can drive up interest rates in the long-run, and may already be choking off interbank lending.

But that’s not the only type of government debt. For example, there is “intragovernmental” debt, which is essentially debt that the federal government owes to itself, such as debt it owes to the so-called Social Security Trust Fund. If publicly held debt is like the money you borrowed from a bank, intragovernmental debt is like the money you swiped from your kid’s piggy bank. It may not be on your credit report, but you still have to pay it back.

Today, intragovernmental debt exceeds $4.6 trillion. The good news here is that intragovernmental debt is not projected to grow much in the future. The bad news is that that is because both Social Security and Medicare are already running deficits — there’s nothing left to steal.

As if that’s not enough, there is also a third category of government debt: “implicit debt.” This represents the unfunded obligations of programs such as Social Security and Medicare — the amount that those programs owe in benefits in excess of the amount of taxes that they expect to take in. Think of it as bills you know are going to come in next month but haven’t been delivered yet.

According to the annual report of the Social Security system’s trustees, that program’s unfunded liabilities now exceed $18 trillion. Medicare is in even worse shape. The most recent estimate of its finances, also released this week, warns that Medicare owes $36.8 trillion more in benefits that it is expected to be able to pay for. And that is the optimistic outlook: It assumes that all the projected savings from President Obama’s health care reform actually happen as promised, something that even Medicare’s own actuaries are deeply skeptical of. If those savings don’t materialize, Medicare’s debt could actually top $90 trillion!

Add it all up, and total US debt actually exceeds 900% of GDP. That’s somewhere in excess of $120 trillion. We are beginning to talk real money here.

The CBO also contains bad news for those who believe that we can fix this problem simply by cutting “fraud, waste and abuse.” As CBO points out, the projected growth in the debt “is attributable entirely to increases in spending on several large mandatory programs: Social Security, Medicare, Medicaid, and (to a lesser extent) insurance subsidies that will be provided through [Obamacare].” There is simply no way to deal with our debt problems without reforming those entitlement programs.

Finally, the CBO report makes it clear that we have a debt problem because spending is too high, not because taxes are too low. In fact, even though taxes are currently at a near historic low as a proportion of the economy, that is largely a result of the recession. If the economy returns to normal growth rates (a big “if”), federal revenues will not only rise, but will actually be higher than the postwar average percentage of GDP by the end of the decade. In fact, this will happen even if the Bush tax cuts are extended and the Alternative Minimum Tax AMT continues to be patched.

GOP lawmakers who left negotiations with Obama this week over his unwillingness to pledge no new taxes understand this. The problem is the money going out, not coming in.

We face a simple choice: Cut spending or face fiscal catastrophe. The question is: Is Washington listening?

Michael D. Tanner is a senior fellow at the Cato Institute.