America's Debt Crisis Is Much Bigger Than We Think, and Voters Are Part of the Problem

When Americans talk about debt in politics, they typically focus on the biggest spender: the federal government, which has now amassed more than $40 trillion in debt. But new data from the Reason Foundation suggests that the national debt is a symptom of a much deeper problem Americans don’t want to confront: their own role in creating it. 

The United States was founded on a system of federalism, with the federal government handling matters of national concern and states and localities addressing the needs of their own populations. The idea was that officials closer to the people would better understand their needs. But if Americans want to understand the appetite for entitlements and other buy now pay later schemes nationally, they should also look at what they demand closer to home. 

According to a Reason Foundation analysis, combined state and local long-term debt totals $4.92 trillion, and roughly half consists of unfunded retirement benefits for government workers. Unfunded pension liabilities account for $1.55 trillion, or about 31.5 percent, while other unfunded retirement benefits add another $927 billion, or 18.9 percent. Together, those obligations make up more than half of the total, promises made to government workers without the money set aside to pay for them. 

New data out from @ReasonFdn on state and local government finances. About half of state and local long-term debt is unfunded liabilities for retirement benefits for government workers. https://t.co/xczLMzaVc1

— Dominic Pino (@DominicJPino) October 29, 2026

Another 42.4 percent, or $2.09 trillion, comes from bonds, loans, and notes, typically used to finance infrastructure, education, utilities, public facilities, affordable housing, and economic development projects. Other sources account for a much smaller share of the total.

The state's individual breakdown largely fits what conservatives would expect, but not entirely. California and New York carry the most combined state and local long-term debt, while Idaho, Indiana, South Dakota, Tennessee, and Oklahoma have the lowest burdens per resident. Yet Texas ranks third in total long-term debt at $487 billion, and Alaska has the fourth-highest unfunded pension liability per resident. Washington, D.C., meanwhile, has the third-lowest. 

But the clearest example of fiscal irresponsibility is the scale of the retirement promises governments haven’t funded. California alone carries $282 billion in unfunded pension liabilities, while Illinois leads per resident at $17,325. New York and New Jersey add unfunded retiree healthcare obligations of $13,611 and $11,029 per resident, respectively. 

This paints a more complicated picture than many Americans are comfortable admitting. Fiscal irresponsibility doesn’t begin and end in Washington, D.C. It reaches back to voters who, election after election, focus on national politics while failing to hold their own state and local officials accountable. They argue that government spends too much while continuing to vote for expanded benefits and entitlements, tolerate wasteful spending, and let officials off the hook for failing to prosecute fraud.

Unfortunately, when it comes to debt, voters have nobody to blame but themselves. We may say one thing, but every time we vote for another costly promise and brush off the politicians focused on fiscal responsibility, we have forsaken that duty. 

The result will be damning, and France over the past week is a warning of our future.

Fiscal responsibility requires making do with what’s available now. And we may find that problems ranging from waste, fraud, and abuse to mass migration and the decaying moral fabric of our society share a common thread: an overly generous society willing to promise everything, demand little responsibility, and leave the next generation to pay for it.

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