Arnold Kling  

Unfunded Obligations of State and Local Governments

David Friedman on Nuttiness... Rod Replies...

A NCPA study finds

When adjusted using a more appropriate discount rate, however, states' unfunded obligations were 22 percent of U.S. GDP. All but 10 states and the District of Columbia have total adjusted unfunded liabilities above 15 percent of their state GDP, and four states -- Alaska, Hawaii, New Jersey and Ohio -- have adjusted unfunded liabilities above 35 percent of their state GDP.

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CATEGORIES: Fiscal Policy

COMMENTS (5 to date)
David R. Henderson writes:

Stock vs. flow? Relevant comparison is between annualized obligation and GDP (flow and flow). Still scary, but less scary.

Dan Hill writes:

Wow, it takes real talent for the governing class of Alaska to create massive unfunded liabilities - this is a state which has so much oil money it sends residents a check every year and gets way more back from Washington than it sends in taxes.

John Goodman writes:

Get ready for lots of defaults. Also get ready for all kinds of Congressional proposals to bail these plans out. It will give a whole new meaning to the term "moral hazard."

tjames writes:

Hawaii, New Jersey, and Ohio are among states with the higest tax burdens (local and state), according to data. This certainly contradicts those who would have us believe that the solution to the Federal Goverment's unfunded liabilities is higher taxes. Higher taxes might help or hurt, but an overall climate of living within your means - whatever those means - is really what is needed.

Alaska is some sort of outlier, with the lowest tax burden. They might have room to manuever on taxes, plus they could just divert the oil money to these liabilities.

Jack Dean writes:

You can follow the rapidly accelerating public pension crisis daily on

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