Think the U.S. debt is bad? Check out the states!

House Budget Committee Chairman Paul Ryan of Wisconsin talked Tuesday about cutting federal spending by a staggering $6 trillion in the next decade and in the process eliminating the $14.3 trillion national debt. As incredible as these numbers are, all 50 states face perilous fiscal times as well, but they are less able to cope than the federal government. States can't print money, as the federal government can, and they are far more limited in whom and how much they can tax. There is one common factor here, though: Washington and the state capitals are drowning in red ink largely because professional politicians promised excessive entitlement benefits without making provisions to pay for them.

The entitlement crisis is seen most vividly at the state level in the unfunded liabilities of government employee pension systems. But getting a handle on the true scope of these debts is difficult. As Bryan Leonard of StateBudgetSolutions.org wrote in a recent study, "one of the most insidious aspects of pension liability is its stealth nature. Pension obligations don't appear on state balance sheets. As such, states with billions in unfunded pension liabilities may technically brag of 'balanced' budgets while being swamped by pension debt. For example, Arkansas claimed a balanced budget last year, but had at least $2 billion in unfunded pension liabilities. Indeed, the unfunded pension promises in most states dwarf the total outstanding debt, tax revenues and spending." (read more)