By the end of 1993, federal, state, and local governments in the United States owed $4.4 trillion in credit market debt, an average of $16,835 for each American. This total means that governments are the largest borrowers in the country—ahead of households, which borrow for home mortgages and other uses and ahead of corporate and non-corporate businesses, which borrow to finance investments in buildings, machines, and other items. Of the total, the federal government owes $3.3 trillion while state and local governments owe $1.1 trillion.
At the federal level, debt has been rising quickly as each annual deficit adds to the total accumulated national debt. Any notion of ever paying off the debt seems distant as the federal budget has not been balanced since 1969—an unprecedented 26-year string of budget short-falls. The second worst string of unbalanced budgets in U.S. history occurred during the Great Depression and World War II when 16 budgets in a row went unbalanced.
While overshadowed by concern about the national debt, state and local government debt has been piling up quickly since the early 1980s as well. Factors contributing to rising state and local debt levels are discussed starting on page 4.Share