California, Connecticut, Illinois, New Jersey and New York

Around the Nation: Public Debt Bombs

Former British Prime Minister Margaret Thatcher once observed, “The problem with socialism is that eventually you run out of other people’s money.” One facet of that problem has arrived in the form of unfunded liabilities for public “servant” benefits. According to the Pew Center, a $1 trillion gap exists between $3.35 trillion in pension, health care and other retirement benefits promised to current and retired state employees as of fiscal year 2008 and the $2.35 trillion available to pay them. That’s $1 trillion in unfunded liabilities that must be resolved through higher taxes in concert with drastic benefit reductions.

Not without irony, President Obama’s adopted home state of Illinois is in the worst shape of all, managing to fund only 54 percent of those benefits while carrying an astounding unfunded liability of more than $54 billion.

Similar data from the crucibles of democracy also show a strong correlation between states with concentrations of liberals and a state’s budgetary health. The five states in the worst financial shape are all bastions of leftist policies — California, Connecticut, Illinois, New Jersey and New York. Each shares strong appetites for public sector unions and pricey social programs. Illinois, again, is in the worst financial condition, with per-capita debt of $1,877 and unfunded pensions of $17,230. Moody’s rates Illinois’ general obligation just ahead of dead-last California. On the other side of the equation, three of the top five fiscally healthiest states are conservative states (Utah, Nebraska and Texas), while the other two (New Hampshire and Virginia) are swing states.

Considering the unchecked acceleration of the federal government’s looming fiscal Armageddon, voters must ask themselves this November if they wish to call the tune and deal with the issue before debt becomes uncontrollable. Allowing this current crop of suicidal spenders two additional years is an unacceptable alternative.


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