The United States will pay more for the interest on its debt that it does on the military in six years, and unless deep spending cuts are implemented, the country may lose its AAA credit rating. The debt-reduction commission made several recommendations to reduce the growth of the national debt by 50 percent, and yet 60 percent of Americans oppose such changes. Fear of the abyss has been known to manifest solutions unavailable through compromise, and thank goodness for that. Washington may spend a lot of taxpayer money, but it’ll never waste a crisis.
The largest 15 states by size of their economy spent an average of 220 percent of their tax receipts over the last decade. Moreover, these deficits would have been worse if the states didn’t receive 20 percent of the $814 billion stimulus package that prevented mass layoffs. After all, state and local workers represent 15 percent of the labor force. It may, however, be a short reprieve, as most of the federal government subsidy programs run out in June of this year.
There’s a real possibility that several municipalities will need a bailout in 2011, increasing the cost that cash-strapped local governments incur to borrow money. The public pensions already have a $1 trillion shortfall and 31 states will have exhausted their pension funds in 15 years. Sounds hard to believe, but pension checks to retirees in Prichard Alabama have already stopped. Arizona has sold the capital building and refuses to pay for kidney and bone marrow transplants to Medicaid patients, citing the unreasonably high cost of saving lives.