Few subjects perplex me as much as public debt. This is true for all forms of debt currently plaguing the nation’s economy, but especially for state and local pension programs and Social Security. Whenever I think I’ve settled on an informed judgment about what we should be doing in either of these areas, someone better informed than I am convinces me otherwise.

Part of the problem is that so much of the decision-making apparatus in handling public debt is hidden away in a forest of acronyms and indecipherable slogans. The organization known as GASB, the Governmental Accounting Standards Board, is the source of a lot of this stuff. GASB is a private, nongovernmental group; the federal government has no role in it, and the states and localities want to keep it that way.

For much of my information on this crazily complex subject, I rely on the Center for State and Local Government Excellence, on whose board I serve. The center conducts research on state and local workforce trends, as well as on pension and health issues. It operates an impressive database on the financial condition of more than 150 public pension plans in this country.

Research by the center, the Pew Charitable Trusts, the Rockefeller Institute and others who have studied this subject points to conclusions that are remarkably similar. In round numbers, states and localities are running around $1 trillion in unfunded pension costs, plus almost $600 billion in unfunded retiree health-care liabilities. Add in more than another half trillion in other outstanding state and local debt, and you’re talking real money.

The good news is that as the Great Recession fades further into our past, the scary numbers of unfunded pension liabilities slowly have begun to recede.  The bad news is that, in order to achieve a position of presumed stability, public pension managers have been forced to invest in much more volatile investments, particularly in the stock market. As interest rates have plummeted, stocks offer the only hope of achieving the numbers that fund managers must attain just to keep their accounts stable.

So it’s no wonder that some key players in this complicated mix are leaning on the Federal Reserve to finally allow interest rates to rise. Historically low rates have been an effective tool in avoiding economic collapse, but now they increasingly are seen as harming the patient. This past spring and summer, the stock market has been lapping up the rewards of almost nonexistent borrowing costs, even though productivity is lagging and corporate profits have been disappointing. At some point, the market will reverse. And then what happens to the balances on pension funds? You don’t want to know.

“There is no easy way out,” a recent analysis from the Rockefeller Institute concludes. “Pension plans can de-risk, reducing the volatility of their investment returns and reducing the volatility of contributions. However, reducing risk almost certainly will require lowering earnings assumptions, which will drive up contribution demands from governments and crowd out services or require tax increases.” Those aren’t choices politicians want to be forced to make.

They’re also not eager to hear about the so-called “third rail of politics,” the federal Social Security program. It also is running a deficit, but it’s not clear how big the deficit is now and what its future prospects might be. Allan Sloan, a former editor of Fortune magazine, has warned for years of the dire state of Social Security’s finances. It’s hard to say with certainty just how bad they are, he writes, because “the system’s serious problems are hidden by ridiculous accounting” that seems almost designed to obscure the truth. His best guess now is that the Treasury has had to borrow more than $200 billion over the past three years to keep the system afloat.

Sloan’s frustration is shared by other experts who have researched the subject. A year ago, economists from Harvard and Dartmouth universities issued a report concluding that since around 2000, official forecasts of the health of the Social Security trust funds have been increasingly biased toward positive results, to the point where the funds could become insolvent before anyone has a chance to come up with remedies. “The bias in their forecasts results in a picture that’s rosier than it really is,” co-author Gary King told the Harvard Gazette. “They’re not saying the system is in good health. Pretty much everybody who evaluates Social Security realizes there’s a problem. But the system is in significantly worse shape than their forecasts are indicating.”

So it appears that both the state and local public pension systems and the Social Security trust funds are in a fair amount of trouble, but it’s hard for even people who know a lot to figure out how much. You can see why I’m perplexed, and we haven’t even touched on what may be the most frustrating issue of all: the overall federal debt bomb, currently estimated at more than $18 trillion. That’s a subject for another column.