State and Local Debt Bombs Ticking Throughout U.S. Heartland

By: David A. Patten, Newsmax

The 50 states have racked up a record $2.4 trillion in bond debt during the economic downturn – the highest level of state and local indebtedness in history, economic analysts warn.

State and local bond debt now consume a whopping 22 percent of the nation’s annual Gross Domestic Product – a bigger slice of the economic pie than ever before, according to Manhattan Institute senior fellow and City Journal senior editor Steven Malanga.

Based on an analysis of federal data on state indebtedness, Malanga calculates that state and local debt has skyrocketed from 12 percent of GDP in 1980, to 15 percent of GDP in 2000, to an estimated 22 percent in 2010. That’s the highest it has ever been, and those figures do not include the estimated $3 trillion in state and local pension obligations. (more)