6 Jan 2013 by Jim Fickett.
As a reminder, here is a short summary on the main features of state and local government debt in the US:
The ratio of state and local explicit debt to income is in the neighborhood of 140%; for the federal government the ratio is more like 590%. In both cases the ratio goes up enormously when unfunded liabilities are included. The outcome in the two cases will be very different. State and local governments cannot print money, and so are reducing services. The federal government will almost certainly get out of unaffordable obligations by printing money. Two of the most important financial decisions a person can make are (1) where to live, so as not to be hit too hard by local budget difficulties, and (2) how to prepare for possible high inflation.
The only source for comprehensive financial information on state and local governments is the Census Bureau, which gives annual reports after long delays (2010 is the latest data). Here is the situation for explicit debt through 2010:
Note that the increase of debt has followed a fairly predictable path, so that the ratio of debt to income has depended mainly on the boom time/ recession cycle of income. So as income recovered from the recession in 2010, the debt-to-income ratio held fairly steady.
(See the Reference page State and local government debt for background, sources, and past commentary.)