States In Debt 4 Trillion : How Did Happen?

The question that is on most peoples minds, given these figures on public debt, is why our representatives didn't understand the problem of accumulative debt for so long? What was the thinking when they continued to push the problem further and further out into the future?

It is a little unsettling to believe they knew what the problems are but didn't care to do anything about them as they knew, politically, they were unpopular. To do the right thing to fix the problems and suffer the public scorn and loss at the poles was unacceptable.

Total State Debt over $4 Trillion
Source: Cory Eucalitto, "State Budget Solutions' Third Annual State Debt Report Shows Total State Debt over $4 Trillion," State Budget Solutions, August 28, 2012.

September 4, 2012
Individual state debt continues to be a problem. State Budget Solutions calculated the debt owed by each state. The calculation includes a state's regular debt, the fiscal year 2013 budget gap, outstanding unemployment trust fund loans, other unfunded post-unemployment benefit liabilities, and the state's unfunded pension liability, says Cory Eucalitto, an author and research analyst at State Budget Solutions and Sunshine Review.

•California's $617 billion debt was more than double the state with the second highest debt.
•Vermont has the least debt of any state with $5.8 billion in debt.
•The aggregate debt across all 50 states totals $4.17 trillion this year.
•This is an improvement over last year's $4.24 trillion total debt.
•The drop in debt can be attributed to reductions in the unemployment trust fund loans and fiscal year budget gap totals.

Unfunded public pension liabilities are a giant source of state debt concern, making up more than half of all state debt.

•Unfunded public pension liabilities total $2.8 trillion.
•This is the result of skipped payments, borrowed funds and inaccurate discount rate assumptions.
•However, while the market-valued liabilities total $2.8 trillion, states calculated the unfunded pension liabilities at $760 billion as a way to underfund their pensions systems.

While unfunded public pension liabilities play a major factor in state debt, other issues are just as concerning and need to be addressed.

•Outstanding debt, in the form of bonds, leases and other forms of primary government debt, as well as post-employment benefit liabilities, which include health care and non-pensions benefit guarantees, each contribute $600 billion to the total debt.
•In addition, outstanding unemployment trust fund loans, which are payments due to the federal government, account for around $24 billion of the total debt.
•Finally, the fiscal year 2013 budget gap (the gap between revenues and expenditures) totals nearly $55 billion of the total state debt.