Mercatus Study Supports Conclusion that Constitutional Debt Limits Matter
The Mercatus Center recently published a ranking of states by fiscal condition. You can read it here.
This chart shows that every state had a balanced budget or a surplus except IL, KY, LA, MD, MA, NJ, NM and NY.
That means 41 out of the 49 states that limit debt or require balanced budgets are not in the red. And that's with less-than-perfect constitutional debt limits.
But that's not all. This chart shows that no state, not even New York, California or Illinois, has a per capita level of long term liabilities (debt in the widest sense) that comes close to what the federal government has imposed on us.
According to this chart, the net long term liabilities owed per person does not exceed $10,000 for any state. This number was built by the author to assess the levels of hidden debt. This number is nowhere near the per capita amount of the federal national debt, which is nearly $60,000, much less the per capita amount of federal unfunded liabilities which is somewhere between $175,000 and $525,000.
Keep in mind that states are supposed to have plenary governmental powers, the federal government is supposed to have limited governmental powers.
It is hard to explain the vastly better fiscal condition of the states relative to the federal government, either in terms of their fiscal balance or on a per capita basis, as a product of anything other than better fiscal management, which is certainly strongly encouraged by having a debt limit or Balanced Budget Amendment.
This study bodes well for the impact of the Compact's Balanced Budget Amendment when it is ratified!