Moody’s Investors Service voices concerns about the long-term creditworthiness of federal securities, citing exploding health care and Social Security obligations; Senator Clinton proposes a stimulus package that would expand entitlements to low-income Americans; Citigroup has to go abroad to find capital to cover losses that arose because of improper risk management: All these things are linked.

Health care and Social Security programs have added up to a clever Ponzi scheme ever since the New Deal, with young workers paying for the unfunded health and retirement obligations of their parents’ generation.

Moody’s announcement that entitlement programs will soon be unsustainable is neither new nor surprising. For decades, serious observers have known that federal health care and Social Security costs would explode when the baby boomer generation began to retire in large numbers. For the foreseeable future, the size of the retirement population will grow more rapidly than the workforce, and health care costs for elderly individuals are skyrocketing. Federal estimates of the revenue shortfall are $45 trillion during the next 75 years, up from $27 trillion in just 2003. Without substantial changes, our federal finances are insolvent.

The Ponzi scheme initiated during the New Deal is no longer sustainable. Long-term investments denominated in dollars increasingly suffer from the overhang of federal entitlement spending.

Bipartisan blue ribbon commissions of experts have convened many times and made sensible recommendations. President Bush invested substantial political capital in Social Security reform between 2003 and 2006, all apparently for naught. Congress, which wrote the laws leading to unsustainable health care and Social Security programs, does not appear to be interested in avoiding the fast-approaching financial calamity.

Moody’s understands what Congress does not: Unsustainable entitlement programs do more economic harm than good. Among the presidential candidates, only Fred Thompson has made Social Security reform a central issue, and none has made Medicare reform central.

All of which brings us to Mrs. Clinton’s stimulus program, a five-part program estimated to cost between $75 billion and $110 billion. Four parts of the plan would increase entitlement programs for low-income Americans, including $30 billion to states to deal with housing issues related to the subprime mortgage issue.

If only it were that simple. Ignore for the moment that it’s easy to propose legislative solutions that have no realistic chance of passage. Based on the undistinguished legislative records on serious economic laws of all of the presidential candidates, each can blissfully propose the most fanciful legislative proposals without fear of ever facing the consequences of actual new laws.

Mrs. Clinton’s program fundamentally misses the underlying dilemma. Our short-term economic difficulties are the result of bad private risk management of financial portfolios; our longer-term predicaments are bad risk management of federal entitlement programs. Unduly risky portfolios of private investments have been funded; enormous unfunded liabilities are on the federal books. Additional spending will do nothing to solve either problem.

A sound federal budget would not have enabled Citigroup to escape its poor risk management practices, but it might have made Citigroup’s recovery easier. Citigroup has looked for financing from sovereign wealth funds controlled by the governments of Saudi Arabia, Kuwait, China, Abu Dhabi, and other countries. They do not have the luxury of a legislature capable of spawning dozens of presidential candidates but not a single law to repair unsustainable programs. Under better national financial circumstances, Citigroup could have looked domestically as well as abroad for new financing.

Sadly, our federal government also looks to the same foreign investors and sovereign wealth funds to help finance moderate budget deficits today and daunting deficits tomorrow. The few billion needed to resuscitate the wilted Citigroup will pale when compared to the tens of trillions our federal government will need to borrow in coming decades.

Mrs. Clinton and others in Congress have called for oversight hearings into the regulation of private financial practices at institutions such as Citigroup. Congress would do well to put its own financial practices in order before lecturing the private sector, and primary voters would do well to take a careful look at candidates’ promises.

A former FCC commissioner, Mr. Furchtgott-Roth is president of Furchtgott-Roth Economic Enterprises. He is organizing a seminar series at the Hudson Institute. He can be reached at hfr@furchtgott-roth.com.