By way of introduction, direct government costs are cash expenditures by federal, state, and local governments; the costs of future promised or expected expenditures are not included until the money is spent. Indirect costs are expenditures or the equivalent incurred by individuals and businesses in complying with government regulations and mandates, again at all levels of government. The pros and cons of these expenditures is beyond the scope of this article, which is concerned solely with the actuarial exercise of projecting future costs based on an analysis of historical experience in the light of present and anticipated conditions.

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