The annual Truth In Accounting “Financial State of the States (FSOS)” report is out. The most liberal states are so far in the red with pension obligations or bond debt floated to pay the pensions that they’re not coming back to black without the Fed inflating us out of it. Unlike the Federal government, the states’ debt is denominated in Federal currency so MMT cannot save them without continuous, massive Federal help in the form of inflation and bailouts which would largely be the same thing.
I don’t foresee public sector pensions being trimmed until the taxpayer looks like a Holocaust victim. Expect a lot of internal migration and possibly emigration. For example, middle class Illinois’ citizens who want to live are moving to Indiana because they can no longer afford their property taxes which are assessed to pay the pensions (“They hate us for our freedoms” – GWB). Uber-wealthy citizens (Cloud People) talk about moving to Singapore. If you’re considering moving, Truth In Accounting’s State Data Lab may be of assistance to you, though Americans’ problem is we can’t move away from ourselves.