Much of the growth in Federal spending is due to Medicare and Medicaid.
Although defense spending is no slouch.
But State governments are no pikers at spending either. Or at least promising pensions to public sector workers.
Take Illinois (I confess, I used to live in Chicago). Look at this chart of Illinois promised state pension benefits compared to other metrics such as state general revenues and personal income.
Since 1987,Illinois total state pension benefits owed to workers have grown multiple times faster than any other measure of the economy. Total benefits have grown at an annually compounded rate of 8.8 percent over the past three decades. Compared to 1987, pension benefits are up 1,061 percent, which is:
○ 6 times more than total state general revenue growth (236 percent) over the same time period;
○ 8.4 times more than median household income growth (127 percent); and
○ 9.5 times faster than inflation (111 percent).
In 1987, households were on the hook for $4,300 in promised pension benefits. That amount swelled to over $43,000 per household by 2016.
Illinois had the third-highest pension benefit growth in the nation, higher than all its peer states. Only New Jersey and New Hampshire have faster growing pension benefits.
Fortunately for The Big Ten Conference, Wisconsin, Michigan and Ohio all have less than 4% annual growth in pension liabilities. Unfortunately, Rutgers (New Jersey), Illinois and Northwestern (Illinois) followed by Nebraska are all at or above 6.6% annual growth.
And no state has a fully-funded pension for state workers (state average is only 66%).
Unfortunately, we have the public sector pension boogie with no end in sight, other than massive growth in state and local taxes.