A blue state deep in the red

By Jim Stergios
July 2nd, 2008

Carddata.com notes that U.S. consumers racked up an estimated $51 billion worth of fast food on their personal credit and debit cards in 2006, compared to $33.2 billion one year earlier. That tells you how far in debt we are, right? An Amex card for a burger and fries.

But Creditcards.com notes that

- The median U.S. household income is currently $43,200 and the typical family’s credit card balance is now almost 5 percent of their annual income (Source: Federal Reserve).
- Of the households that owe money on credit cards, the median balance was $2,200 — meaning half owe more, half less (Source: MSN Money).

Doesn’t sound as bad, if you put it that way. I know that there are other forms of personal debt. But it still is not nearly as bad as the state’s debt level. If you do an all-in analysis of the debt and liabilities for state government and quasi-public agencies including pensions, benefits and the backlog of infrastructure improvements we have, it totals to above $90 billion just for the state of Massachusetts. That’s above $15,000 per person (man, woman and child). And that’s not including local commitments made to unionized employees, which has already bankrupted a number of cities across the country, and, ahem, here in the Commonwealth.

Try these numbers on for size. First we have $50 billion in total public sector debt, due to:
- Total Direct Debt of the Commonwealth $20.8 billion
- Total Quasi Public Agency Debt $29.2 billion

Add to that the $13 billion for the public pension liability, another $13 billion for the unfunded retiree healthcare liability, and a minimum of $17 billion in deferred maintenance backlog. Folks, that comes to $93 billion, and we could easily have estimated more (the deferred maintenance backlog is certain to be much more!).