Crisis for 46 State Governments Facing Greek-Style Deficits

How similar are any of these crises to Greece?<p>My home state, Illinois, is in one of the worst crunches of all; by the numbers, we're in worse shape than California. But the cause of our problems doesn't look like an intractable macroeconomic problem (unlike Greece's). Rather, the politicians in Springfield have been pilfering pension funds to effect stealth loans to finance other parts of government, and deferring contributions to pension plans, so that the budget process never has to come to grips with how expensive these plans are and reduce them or offset them with wage and headcount cuts.<p>Nothing other than politics appears to prevent Illinois from fixing this. Eventually it will have to, because we'll flip out if they raise taxes. Whereas there aren't many (tractable) political decisions that Greece can make to right itself.

Both US states and Greece have the same root problem. In neither can the political leaders inflate the currency to get out of the consequences of their years of fiscal mismanagement. The trick of currency inflation, since the advent of fiat money, has saved many administrations around the Globe.

Virtually all of these states could make significant progress on their budgets by cutting the pay of government employees. Teachers, police officers and assorted bureaucrats all tend to be overpaid for the work they do.<p>The fact that not a single state is even attempting to do this suggests they are all just waiting for the feds to bail them out.

What are the four states that is not in an economic crisis right now?

is that the kind of deficit where taxpayers will have to take it up the ... ?