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Category: Money

State Debt plus Pension Obligations is Huge Problem

Written on January 28, 2011 by Japhet Writ

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States' debt loads are high enough, but when you combine them with their pension obligations, the numbers are really eye-popping.

With the State’s debt high enough, addition of can be a huge liability. That is according to ’s Investor Service report. Take Hawaii’s debt for instance: It has $5.2 billion of debt, plus pension obligations of the same amount. As a result, the dual accountability makes up 16.2% of Hawaii’s economy.

With states having a difficult time paying for school and social services alone, many struggles to make big pension payments. That said, a state’s pension and debt loads garner more attention. Just how deep states are buried in their liabilities is just a matter of debate.

Though it is no wonder that Moody’s state ratings include pension obligations, this is the first time that the agency released a report of . According to them, it is imperative to show investors a state’s total obligations, especially now that pension liabilities are growing more swiftly in recent years.

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