Recent statistics show that states are racking up more debt. According to Moody’s Investors Service, state debt increased by 10.3% in 2009, reaching $460 billion. CNN Money says the average state debt per person reached $936. Previously in 2008 it was sitting at $865 per person.
CNN Money says that states will likely use bond markets to make up the difference. The expected shortfall for 2012 will reach $72 billion. Moody’s official Robert Kurtter told CNN that debt “is a tool to help bridge the gap between the downturn and when the economy starts to recover.”
The good news for states is that interest rates are extremely low, making it a good time to issue debt. Also, federal legislation subsidizes interest payments on some municipal bonds. The states with the lowest amount of debt include Nebraska, Wyoming and Iowa. In Nebraska, debt is just $15 per person. States with the highest debt include Connecticut, Massachusetts and Hawaii. The debt per person in Connecticut is just under $5,000.
Tags: Economics, Bonds, government debt, Finance, Moody's Investors Service, state debt
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