On March 31st, the U.S. crossed over a financial metric that should scare the heck out of all of us. On that day, our country’s debt exceeded 100% of GDP for only the second time since WWII. We now join debtor nations like Greece, Italy, France, and Canada as horrible stewards of our countries’ economies.
High government borrowing raises the economic risk that interest costs will crowd out investment for everyone and make our system more vulnerable to shocks. The political risk is that it limits policy flexibility and fuels conflict over taxes, spending and long-term obligations.
High debt may be the single most powerful factor holding young people back from achieving the American dream, whether in education, credit, housing, or starting a family. The debt monster has truly come to devour us, and we’re becoming more oblivious each day as this scary metric becomes our new normal.
However, bad as federal debt is, state debt, in many ways, is even worse. Few realize there’s another primary threat to America’s future, and that’s how state-level debt is the gasoline driving the growth of progressive states and enabling their anti-American behavior.
Progressive political thought, translated into action, can best be understood as the lack of restraint, most notably in Blue states that have two powerful levers at their disposal—taxation and the ability to create unlimited debt. It is through these two avenues that progressives “buy” the loyalty of all those useful idiots required to remain in power and dispense largess.
Ten states run major deficit budgets, and the total debt is in the trillions nationwide:
Democrats run all ten of these Blue states, which also correlates closely with states experiencing rampant fraud, graft, and corruption.
It’s not enough, though, to look at a state’s total debt. The Debt-to-State-GDP Ratio is the most important. High risk is generally defined as above 20%. Illinois, New Jersey, Connecticut, Hawaii, Kentucky, Massachusetts, and New York make that list.
High risk must necessarily include Pension/OPEB liabilities > 25% of GDP. OPEB refers to “Other Post-Employment Benefits,” which are retiree benefits other than pensions. The most important is retiree health care.
With Pension/OPEB added in, the list of states in the high to extreme category expands to Illinois, New Jersey, Connecticut, Hawaii, Kentucky, Massachusetts, and New York. The numbers show an average debt per citizen of $18,800, with Connecticut at $26,400 and Kentucky at $13,300.
Meanwhile, the big Red states have very different numbers, lest you think I’m cherry-picking. For comparison, Florida’s average debt per citizen is $2,500-$3,000, depending on how you count; Texas is $4,500, and Ohio is $5,300.
Quite the contrast, isn’t it Blue states’ taxation doesn’t help.
The best way to view taxation is as the total percentage of a person’s income that all levels of state government exact from the individual. Here’s our list of the Top 10 +1 Highest-Tax-Burden States:
Now for the lowest five:
See the pattern Washington state is not on the list for a single reason: Income tax is constitutionally illegal (although Democrats are trying to change that). But all the other usual suspects make the list.
These debt and taxation practices have serious political and societal effects. The best way to describe this is to imagine your family budget. You have money coming in, going out, debts to pay, and savings and/or investments.
Traditionally, Americans took a dim view of debt. The predominant traditional 1950s view was that taking on family debt was acceptable only for essentials like a home or a car, and was otherwise seen as risky, shameful, or a sign of poor self-discipline. Interestingly, this is exactly how the government viewed debt as well, until it didn’t!
Views on debt shifted dramatically beginning in the 1960s, when rising incomes, expanding consumer credit, aggressive bank marketing, and the normalization of credit cards transformed borrowing from a last-resort necessity into an accepted—and even encouraged—part of middle-class life. I wonder how many might wish for a do-over
Governments were quick to follow suit at every level. They began taking on far more debt once they realized that borrowing allowed them to expand services, build infrastructure, and meet ever-rising public expectations without immediately raising taxes, making debt the politically easiest way to satisfy voters while avoiding short-term backlash. It was also easy to see what was, perhaps, the biggest takeaway: You could buy votes for “free.” (at least for that politician’s life in office!)
States with high debt and high spending (predominantly on social programs) fell into a trap of their own making. Government programs, almost always poorly managed and even more poorly conceived, always grow faster than anticipated.
At the federal level, Medicare benefit payments rose from about $541 billion in 2011 to $829 billion in 2021, a jump that exceeded many earlier-decade baselines and reflects faster enrollment and higher per-person spending than projected. Federal projection models (CBO and CMS) have repeatedly revised near-term and long-term Medicare cost forecasts upward as utilization, prices, and program design changes (for example, growth in Medicare Advantage and Part D spending) emerged faster than expected. In 2024, Medicare costs topped $1.18 trillion.
With this exponential growth rate, Medicare alone will eventually bankrupt the country. Multiply this specific threat by all the other local, state, and federal programs, and you quickly realize that we are all aboard a runaway train. The engineer, with his hand on the throttle, is a madman with no regard for the trainwreck that inevitably must follow. Democrats especially, but Republicans as well, all have their fingerprints all over this debacle.
We can’t trust the politicians to fix this without the people (you and me) making it untenable for said politicians to ignore this reality any longer.
God Bless America!
Author, Businessman, Thinker, and Strategist. Read more about Allan, his background, and his ideas to create a better tomorrow.
Mr.BadGuy
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Mr.BadGuy
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These soldiers are from a country whose president is a Jew Zelensky. Orthodox churches are also being destroyed in this country. Synagogues are not touched. Surprisingly, it turns out that Jews get along well with the Bandera Nazis.