State Credit Rating

So West Virginia has better credit than California. Good work Gavin.

It’s because West Virginia solved its public pension crisis by giving everyone heroin so they wouldn’t reach retirement age.

Illinois you in danger gurl...

Mississippi has better credit than California. How can that be. I was always under the impression that Mississippi was America's equivalent of the Third World (poverty, terrible stats on just about everything, religious and backward)

Jersey!!!!

Umm, gotta see the backing data on this one.

Florida should not be green.

R6 Its fairly consistent with the ratings from the three major credit rating agencies, Standard & Poor's, Fitch and Moody's. that I found on Wikipaedia. Florida is indeed dark green for all three of them. That info is from 2017, suspect the one from OP may be more recent, showing the economic impact from COVID

Thank God for Louisiana!

Standard and Poors as of the beginning of this month

Yup Florida is AAA. Surprises me too. And yeah California is still worse than Mississippi.

Something not right

California and Illinois near junk status. Go figure.

[quote] I was always under the impression that Mississippi was America's equivalent of the Third World

A state with a high percentage of poor people has nothing to do with how the state government pays their bills.

R2 I know I shouldn’t be laughing but I am.

The federal government better not bail out the states *unless* the states force retiring boomers to take a haircut on their pensions. With all the suffering upcoming in the coming decades, they’re really the last people who deserve a federal bailout. And, make no mistake, they are the cause of these fiscal woes. Public pensions are obscene by any objective standard in a lot of these states.

I'm not an American, but I always thought Connecticut was well off? Why is their credit rating so low?

Because they don't pay their bills properly, they're overextended and are probably borrowed out the wazoo and have a huge debt load. The same reason a private citizen's credit rating is low.

R14 things have changed a little bit. Once upon a time, you took the commuter train from Greenwich to Grand Central and then the subway to Wall Street. Now, you’re a retiree living in Greenwich who desperately wants to move to Florida to escape high taxes in Connecticut, but you can’t get an offer on your house for what you’re asking to break even because all these younguns now working on Wall Street want to live in NYC now. Once upon a time, companies like Aetna had big suburban office campuses that contributed jobs and tax revenue; now those jobs are back downtown closer to where the talent lives.

Things may go back in the opposite direction due to COVID/race riots, though.

R13 is right about the public pensions , those are often a huge bulk of state and city budgets.

Governor Fred Flintstone has to borrow money AGAIN.

[quote] Mississippi has better credit than California. How can that be.

[quote] So West Virginia has better credit than California. Good work Gavin.

So some states do little to nothing for their citizens, like Mississippi and West Virginia, and some states do a lot more for their citizens, like education and medical services.

If you don't spend much on your citizens or infrastructure your revenue intake is in good shape compared to your expenditures and your credit rating is good. This isn't rocket science people.

Meanwhile, Illinois keeps taking and taking and taking....and failing.

I'm genuinely curious how Illinois will fix their pension crisis. i'm guessing just continuing to increase taxes.

These low credit ratings are not caused by a failure to pay bills. There are caused by the promises that the states have made in terms of future obligations.

For states like Illinois, the only way to meet its future obligations (mostly pensions for union members) is massive tax increases. Unfortunately, everybody knows that when a state raises its income taxes, people move away, which tends to reduce revenue and force even higher taxes. This is the so-called death spiral.

Illinois and New Jersey are in a death spiral for sure. California isn't, yet, but there is some fear that if they continue to lose population, they will.

It’s weird to me no one talks about the out of control debt governments have. Pensions are a huge bomb that people keep pretending don’t exist. It’s a no win situation - no politician gets a benefit from dealing with it. It’s going to lead to insolvency - and the only solution to that is cutting pensions. So anyone promised a pension from those states shouldn’t count on it if they are under 50. Politics and financial management don’t mix.

R23, it's terrifying actually. New York and Illinois have the worst pension issues in the country. Not a good future for these states :-(

R22, there is another solution, and it's historically the ones that governments use to get out of debt problems.

That's to inflate the currency by running the printing presses full speed. Take a look at the chart of what economists call the "money supply". That is the total amount of money (currency, credit card debt, mortgage debt, checking and savings account balances, etc.) that exists in an economy.

You know that little nest egg you are building up to retire on? Well guess what? It's not gaining value - it's losing value because its purchasing power is shrinking.

But that's OK, because the government is giving everyone "free" healthcare. It's also going to "pay off" everyones student loans. Just don't look to hard at what your paycheck or savings will buy.