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Those who think Congress and President Barack Obama avoiding the “fiscal cliff” equals financial redemption for America are sorely mistaken.
If they do, it would be only a temporary fix for a country that borrows 46 cents of every dollar it spends.
And it doesn’t even touch the festering wound undermining the solvency of most capitals throughout the country: state debt.
According to the nonpartisan nonprofit State Budget Solutions (www.statebudgetsolutions.org), state debt alone is on average more than $37,000 per private worker and $13,000 per capita. Overall the figure is more than $4 trillion.
It’s important to emphasize why measuring debt per private worker is important. Private sector workers are the ones who create wealth. Government redistributes it, so those who generate the money that everyone else uses are ultimately responsible for the tab.
Unfortunately, the $4 trillion number is actually conservative because it does not include things like planned transportation projects or other capital projects in a state that are not paid for. It is, however, much more accurate than individual state assessments of debt, which disguise pension and other post retirement benefits for public employees by using misleading budget tactics and outrageous projections for investment returns on their pension funds.
Those methods mean the true financial position of a state is shrouded, even though all except Vermont require a balanced budget. It’s obvious no one knows what is going on because public employee unions have so far been silent on the issue that could decimate their members’ retirement. If they understood the problem, there would be union rioters in most state capitals like those in Lansing, Mich., earlier this week after a right-to-work law passed.