While New York has the most per capita government debt in the US ($18,411), California, the most populated state, has the highest total debt ($507 billion).
New York
With a total debt of nearly $203.77 billion, New York is the most indebted state in the US. New York’s total assets are estimated to be around $106.61 billion, with a debt-to-asset ratio of 273.8 percent. Overspending on Medicaid is the primary cause of New York’s massive debt. In recent years, New York has attempted to close budget gaps by slashing education funding and health-care spending.
New Jersey
New Jersey has the country’s second-highest debt level. The state’s total liabilities are $222.27 billion, which is $198.67 billion more than its assets. The debt-to-income ratio in New Jersey is 441.7 percent. The state’s underfunded pension and benefits scheme for public employees is the main source of debt. Because of the state’s debt and the increased demand to support other priorities such as infrastructure and education, New Jersey politicians are considering tax increases.
Illinois
Illinois has the third-highest debt in the country, with $248.67 in total liabilities. Illinois has an unfunded liabilities of $187.7 billion on its $53.05 billion in assets. This results in a debt-to-income ratio of 468.7%, the highest in the United States. To pay it off, everyone of Illinois’ 12.7 million residents would have to pay $14,780. In Illinois, as in New Jersey, the largest issue contributing to the debt is billions of dollars in pension and health-care benefits for retired government workers.
Massachusetts
Massachusetts is the state with the fourth-highest debt in the country. Massachusetts has a debt of $68.43 billion, with total liabilities of $104.53 billion and total assets of $34.214 billion. The amount of long-term liabilities is 305.5 percent of total assets. Infrastructure and pensions are the two major sources of debt in Massachusetts.
California
California has the fifth-highest debt of any state, with $362.87 billion in total liabilities. California’s total assets are $301.1 billion, resulting in a $55.96 billion net debt and a debt ratio of 120.5 percent. Retirement liabilities, budgetary borrowing, and bond debt are the three types of debt and liabilities that California has. California’s debt totals over $1 trillion when federal, state, and local debts are added together. According to the analysis, the debt would cost each Californian $33,000, or $74,000 per taxpayer.
Who owns the most US debt?
Debt of the State Over $22 trillion of the national debt is held by the general populace. 1 A substantial amount of the public debt is held by foreign governments, with the remainder held by American banks and investors, the Federal Reserve, state and local governments, mutual funds, pension funds, insurance companies, and savings bonds.
Is California state in debt?
As a result, state debt levels vary greatly, both in terms of overall and per capita debt. While New York has the most per capita government debt in the US ($18,411), California, the most populated state, has the highest total debt ($507 billion).
Is California debt Free?
States were rated by taxpayer burden in a report released in September 2017 by the nonprofit Truth in Accounting (TIA), which shows “the amount each taxpayer would have to donate to their state’s treasury in order for the state to be debt-free” as of 2016. California came in 43rd place, with a $21,600 tax burden.
TIA calculated a state’s taxpayer burden or surplus by subtracting capital assets and assets restricted by law (buildings, roads, land, etc.) from total reported assets to calculate “available assets,” which were then compared to the amount of money the state owes in bills, including retirement obligations like pension plans and healthcare benefits for retirees.
The difference between available assets and total bills was dubbed a taxpayer surplus if it was positive; if it was negative, it was called a taxpayer burden. This sum was then divided by the number of individual tax returns having a positive tax liability, yielding a per-taxpayer estimate of the overall state surplus or burden.
From 2009 to 2016, the table below shows the amount of taxpayer burden or surplus in California. Negative figures represent a taxpayer burden, while positive figures represent a taxpayer surplus in the table below.
Which state has the most debt 2021?
While New York has the most per capita government debt in the US ($18,411), California, the most populated state, has the highest total debt ($507 billion). Wyoming, on the other hand, has the lowest overall and per capita debt, at around $2 billion and $3,437 per person, respectively.
What states are financially in trouble?
According to a survey performed by the Rand Corporation, nearly one-third (31%) of adults with household incomes between $25,000 and $124,999 are earning less as a result of the pandemic. 27 percent of this population is encountering financial difficulties.
Some states are doing better financially than others, and their inhabitants are benefiting from it. Many of the hardest-hit states were already deeply in debt before 2020, and the pandemic has simply exacerbated the situation.
Truth in Accounting’s “Financial State of the States 2020” assessment assesses states based on their fiscal health. Here’s a look at the states that did the poorest, based on fiscal year 2019 comprehensive annual financial reports, with extra data from the US Census Bureau. See which states’ inhabitants are having financial difficulties.
How much bond debt does California have?
One thing to consider as California voters weigh their alternatives in the recall election is the state’s long-term fiscal stability. With federal taxpayers providing $26 billion in COVID-19 relief and stimulus to California’s state government, as well as a big state budget surplus this year, it’s easy to forget about the “wall of debt” that former Gov. Jerry Brown warned us about. While the state’s finances have been improving in recent years, Gov. Gavin Newsom’s administration has yet to expand on many of Gov. Jerry Brown’s budgetary reforms, leaving the state exposed to future economic storms.
California’s 2020 audited financial statements are more than four months late, so the state government and its component units (i.e., subsidiaries like the University of California system and the California Housing Finance Agency) have a total of $359 billion in long-term obligations, according to the state’s 2019 audited financial statement.
With a surprise $75 billion budget surplus this year, California’s strong financial position presented an opportunity to utilize the money to pay down some of the state’s debt, but lawmakers in Sacramento have overwhelmingly chosen to spend it on shorter-term goals.
The majority of California’s long-term liabilities, which make up the debt wall, are unfulfilled future obligations to provide promised pensions and health-care benefits to retiring state employees. Governor Brown enacted steps to limit the rise of these public pension liabilities, but Governor Newsom’s administration has not followed through.
Brown signed legislation to aid the state’s two pension systems, the California Public Employees’ Retirement System (CalPERS) and the California State Teachers’ Retirement System (CalSTRS), start digging their way out of their deep financial craters. New hires’ retirement ages were raised, and pension contribution rates were increased as part of these measures. However, the two systems are still severely underfunded, with asset-to-actuarial-liabilities ratios of around 71% as of June 30, 2020.
Despite the fact that these funded ratios should improve significantly when updated for 2021, given current stock market success, both pension systems remain significantly underfunded at a time when equities prices are at all-time highs. CalPERS has $163 billion in unfunded liabilities as of 2020, while CalSTRS had $106 billion in unfunded liabilities—debt that ultimately falls to state and local taxpayers.
California might simply make more pension contributions (above and above those advised by system actuaries) to pay down unfunded liabilities instead of undertaking major adjustments. This was started by Brown, and it was continued by Newsom at the start of his presidency. Despite the establishment of COVD-19, Newsom withdrew a projected $2.4 billion extra payment to CalPERS in 2020-2021.
When COVID-19 initially hit, fears of a prolonged economic slowdown were understandable, but instead of a budgetary disaster, California and its tech industry saw an economic boom, resulting in a $75 billion surplus for the state government. Even after it became evident that the state would not run a deficit, Newsom refused to make the pension payment he had suspended.
Proposition 2 (2014), another Brown legacy, requires the state to apply a portion of capital gains tax revenue to public pensions and other long-term obligations when tax collections exceed a certain level. The state’s 2021-22 budget includes $2.3 billion in additional CalSTRS and CalPERS contributions—payments mandated by Proposition 2 (2014), which requires the state to apply a portion of capital gains tax revenue to public pensions and other long-term obligations when tax collections exceed a certain level.
Instead of taking advantage of the state budget surplus and going above and beyond the statutory minimum to pay down the debt, Newsom and the state legislature prioritized spending on stimulus checks—in addition to checks provided by the federal government—and funding things like broadband infrastructure, which is also redundant because the federal government is sending California money for broadband-related projects.
Financial reforms enacted under the Brown administration are still assisting California in overcoming its debt burden. Hopefully, whoever wins the recall election will make this important work a priority and continue it.
How Much Does China owe the US?
Ownership of US Debt is Broken Down China owns around $1.1 trillion in US debt, which is somewhat more than Japan. Whether you’re an American retiree or a Chinese bank, you should consider investing in American debt.
What happens if United States defaults on debt?
The government will be unable to borrow extra funds to meet its obligations, including interest payments to bondholders, unless Congress suspends or raises the debt ceiling. That would very certainly result in a default.
Investors who own U.S. debt, such as pension funds and banks, may go bankrupt. Hundreds of millions of Americans and hundreds of businesses that rely on government assistance might be harmed. The value of the dollar may plummet, and the US economy would almost certainly slip back into recession.
And that’s only the beginning. The dollar’s unique status as the world’s primary “unit of account,” implying that it is widely used in global finance and trade, could be jeopardized. Americans would be unable to sustain their current standard of living without this position.
A US default would trigger a chain of events, including a sinking dollar and rising inflation, that, in my opinion, would lead to the dollar’s demise as a global unit of account.
All of this would make it far more difficult for the United States to afford all of the goods it buys from other countries, lowering Americans’ living standards.
How much debt does Federal Reserve own?
The Fed has purchased more than $3.3 trillion in Treasury debt in the last two years alone, accounting for more than half of the cumulative federal budget deficits for 2020 and 2021.
