The National Debt is huge, crushing, in fact, but we all seem to be insulated from it, as though it doesn’t matter. Note to all Americans – there isn’t anyone to bail us out of this mess, other than us.
The national debt isn’t the only financial problem we have. As bad as $17 trillion in the hole is, add another $5 trillion for states in financial trouble. If you remember, we are the “United States.” State Budget Solutions, a non-partisan, non-profit, national public policy organization, disclosed the total debt owed by U.S. state governments now stands at $5.1 trillion, around $16,180 for each state resident.
Your own credit card debt doesn’t seem so bad now, does it? Aren’t we lucky to have competent people handling State and Federal spending for us?
That $5.1 trillion in debt is one-third of annual gross state product on average.
If you pause for a minute to really think about what that means, you might start feeling a strange emptiness in your stomach.
The report said, “Since 2010, SBS has conducted a comprehensive examination of debts facing the 50 state governments. These reports have repeatedly found trillions in combined debt that stand in stark contrast to officials’ proclamations of balanced budgets and belt-tightening.”
Any thinking person already knew the stupid games that elected representatives have been playing for years. California’s Democrat-controlled legislature has been playing this game for years, pretending to fix massive holes in the budget.
State debt is comprised of four different factors including:
- Unfunded public pension liabilities
- Outstanding government debt, including bonds and leases
- Unfunded other post-employment benefit liabilities (OPEB), mainly retirees’ health benefits
- Outstanding unemployment trust fund loans from the federal government.
Unfunded public pension liabilities far outweigh other liabilities with a $3.9 trillion debt followed by unfunded OPEB liabilities at $528.7 billion and unemployment trust fund loans total $19.9 billion, according to SBS.
California, New York, Texas, Illinois and Ohio are the top five debt-ridden states in that order, which is as you would expect
The only four states with les than $10 billion in debt are South Dakota, Vermont, North Dakota and Wyoming with their obviously small populations
“Over time, state debt will exact a toll on state budgets. Money once expected to fund vital services like education and healthcare will have to be redirected to debt service, increased contributions to public pension systems, and more.” – State Budget Solutions Report
The mission of State Budget Solutions is to change the way state and local governments do business. They have their work cut out for them, because State governments have made a huge mess!