The orgy of public sector spending across the globe in recent years is coming home to roost. Speculation is now running rampant that the
PIIGS (
Portugal,
Italy,
Ireland,
Greece and
Spain) may drag down the EuroZone by mid-summer. The previously unspeakable or unimaginable – the possibility of national bankruptcy – is now beginning to be talked about openly by a few sober politicians in the United Kingdom,
Japan, and even here in the
United States. For example, Governor Pawlenty has mentioned national bankruptcy in some of his recent speeches as part of his rift against the Obama administration’s “stimulus” spending.
For years, observers of state governments have closely watched the deteriorating fiscal conditions of most of the 50 state governments. But with the heightened awareness of global sovereign debt, more scrutiny is being paid to each state’s indebtedness. As part of its new survey on “The Global Debt Bomb,” Forbes conducted an overview of the states’ debt problems. The five best ranked states were Utah (1), New Hampshire (2), Nebraska (3), Texas (4), and Virginia (5). The five worst ranked were, not surprisingly, New Jersey (46), California, (47), Connecticut (48), New York (49), and Illinois (50).
Minnesota was in the middle of the pack of the Forbes survey, at 18th position. This slightly better-than-average placement is cold comfort considering that the state government carries $866 in public debt per capita but a whopping $14,233 in unfunded public pension liability per capita. Something for taxpayers and lawmakers to consider after last week’s updated Minnesota state budget forecast.
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