What Sinkhole States Don’t Want You to Know
Fergus Hodgson, November 26, 2018 
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US states have amassed at least $1.5 trillion in unfunded liabilities in 2017, even though 49 of them have some form of balanced-budget restriction.
Bill Bergman attempts to answer this puzzle. He is director of research with Truth in Accounting, a nonprofit watchdog that publishes the annual Financial State of the States, a report that provides taxpayers with clear and transparent state-accounting information.
Bergman explains that state governments get away with spending and promising beyond their means due to accounting tricks and regulatory capture by lobbying groups. In particular, retirement obligations have grown beyond what states such as Illinois can afford to pay. What can’t happen won’t happen, and Puerto Rico-like default chaos lies ahead.
40 states in the latest Financial State of the States are considered Sinkhole States, which means they don’t have enough money to pay their bills. (Truth in Accounting)
Recommended Links
- Read the latest Financial State of the States report and follow Truth in Accounting on Facebook, Youtube, and Instagram.
- Read “Fiscal Watchdog: States’ Unfunded Liabilities Grow to $1.5 Trillion” by Paz Gómez on the Epoch Times.
- Read “National Debt Surpasses $20 Trillion for the First Time in US History” by Raven Clabough on the New American.
- Read “Should Public Pension Plan Assets Be Managed for Pensioners, or Taxpayers?” on Truth In Accounting.
- Read “James M. Buchanan on Public-Debt Finance” by Jerry Tempelman on the Independent Review.
If You Liked This Episode
- “Puerto Rico: Tax Haven or Economic Disaster?” Gold Newsletter Podcast.
- “Cris Linge: Unions Have Dug their Own Pension Grave” Gold Newsletter Podcast.
- “The Calm before the Storm: Defaults Ahead” Gold Newsletter Podcast.
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Fergus Hodgson is Gold Newsletter’s roving editor. Follow him on Twitter and Facebook.