By the way, we’re in waaaaay more debt than you think

I can't emphasize enough how important it is that everyone read Steven Malanga's new piece in City Journal, which will certainly not uplift you but will enlighten you concerning the true nature of public debt in this country. While you're focused on the borrowing that goes on in Washington D.C., a lot of it is happening in your state capital or right down the street at your city hall. How much? Try in excess of $6 trillion, much of it in spite of the fact that state constitutions and city charters say all debt is supposed to be approved by voters.

Ha. Suckers!

Today, states and localities engineer most of their borrowing through what Briffault calls “non-debt debt,” a term for bonds designed to avoid legal restrictions on borrowing. For example, courts in some states have decided that when a state’s independent authorities issue bonds, that borrowing isn’t restricted by constitutional debt limits—even if taxpayers are ultimately on the hook for it. If a legislature takes on debt itself, that also doesn’t count against constitutional restrictions on borrowing, according to the judiciaries in some states. Briffault estimates that such evasions are responsible for three-quarters of state debt and two-thirds of municipal obligations incurred through bond offerings. The growth of this kind of borrowing helps explain why state and local debt outstanding from municipal securities has blasted from $2 trillion (in today’s dollars) in 2000 to nearly $3 trillion today—real growth of 50 percent in little over a decade.

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Malanga explains that retiree health care and pensions are an especially big problem because it's not unusual that states and cities have only set aside as little as 6 percent of what they've promised. The nation is of course waking up to this somewhat because of the bankruptcy of the City of Detroit. Many people probably didn't even realize a city could take on that kind of debt. Detroit is an extreme case, of course, because it kept growing the size of government and promises made to past and present employees even as its population was shrinking fast. Detroit started issuing bonds in 2005 just to pay for day-to-day operations, and that's how its own debt swelled to an incredible $18 billion. But governments all across the country face smaller versions of the same problem. They engage in short-term borrowing, and they "pay it back" with new borrowing. Every time they refinance, the cost of borrowing goes up, and the size of the debt goes up, but in the short term they're using this gimmick to make residents think they're getting a better deal than they really are. They get lots of government while their taxes stay relatively low, even as they have no idea that their elected officials are putting them massively on the hook for long-term obligations. How is it possible that this is happening right under Americans' noses and so few people are aware of it? A lot of it, I think, stems from media ignorance. Look how hard it is to get the MSM to understand the seriousness of the debt incurred by Washington. And in most cases, the national media are the most experienced and theoretically knowledgeable in the industry. The reporters who cover city hall in your town may have been around for awhile, but a lot of the time they're less experienced - especially in the smaller towns - and less knowledgeable than the ones who so frustrate us in Washington. They look at a municipal budget and they see things like "general obligation bonds" or pension funds and they don't really understand what that means. If they start asking questions about whether it's right to put taxpayers on the hook for such debts, public officials and media counterparts roll their eyes and look at them as if to say, "Don't be a Tea Party wacko!" That's if the question even occurs to them. This is standard practice in municipal government so why question it? Besides, the culture of state and local journalism tends to be as liberal as it is in Washington, and many journalists are of the opinion that government should spend all that money, and if not for those wacko right-wing conservatives who hate taxes, government wouldn't need to do all this borrowing. But they are borrowing, often without you knowing about it, and often without getting your authorization as the law says they are supposed to do. Malanga explains that judges who are supposed to enforce these laws are often quite willing to play the game as well:

Judges have proved especially eager to approve evasions of debt limits when they’re the ones demanding that states or localities spend money. Back in 2001, New Jersey’s activist supreme court mandated that the legislature embark on a project of building and refurbishing schools (see “The Court That Broke Jersey,” Winter 2012). To comply, Trenton lawmakers announced a plan to borrow $8.6 billion through a bond offering—a shockingly high sum. Taxpayer groups reacted with such outrage that officials knew that voters would never endorse the move. So the legislature decided to channel the borrowing through an independent authority. The taxpayer groups sued, but the state supreme court brushed their objections aside, arguing that a clear precedent existed for such borrowing. The state quickly burned through half of the borrowed money on patronage and inefficient construction practices, so it borrowed another $3.9 billion, again through the authority. Taxpayers, needless to say, will foot the bill.

I see a fundamental threat to our entire system of government in all this. The political class wants to spend, period, with no restraints. When restraints are placed on their ability to spend, they find clever ways around them - often with the complicity of the judiciary - and the media do not call them on it because they are either a) too dumb to recognize what's going on; or b) ideologically in support of what's happening and thus disinclined to blow the whistle. The public keeps getting told that everything is fine, and that every promise that's been made can be kept, until one day it is no longer possible to hide the truth - and then you're Greece. Or Detroit. Or the United States of America, quite possibly at a point in the future that will arrive much sooner than anyone thinks. Someone had better start shining a spotlight on this. I don't think the mainstream media will, and few in the political class are inclined to do so. But if it doesn't happen, I am honestly not sure the American system of government will survive.