While the public is rightly growing alarmed at the explosion of national debt, another debt disaster is growing. As noted in The Wall Street Journal on June 14, other government debt is growing as well.
State and local government debt has soared from $1.4 trillion in 2000 to $2.2 trillion today. As a percentage of America’s GDP, state and local borrowing went from 15% in 2000 to 22% today, and it is projected to hit 24% in just two years.
And much (if not most) of the money is used to finance projects of dubious value. For example, Charlotte, N.C., dumped $154 million into the NASCAR Hall of Fame, hoping to create jobs and draw tourists. But it only created 115 jobs (at well over a million dollars per job!) and attracts fewer tourists annually than does just one actual NASCAR race.
While voters are increasingly reluctant to vote for new bonds, there remains a serious problem: there has been a growth of special agencies, which are allowed to take on new debt without having to get voter approval. And they are borrowing money like mad. Now here is a form of democracy that statists can support!