The federal budget is a deficit, of course, but did you know that state budgets are filled with debt, too?

Steve Malanga says "During the period from 2003-2008, states also took on 38% more debt, increasing their collective indebtedness to $2.19 trillion."

One reason for this increased debt comes straight out of public choice theory: "many [states] fail to address their deep, structural budget problems during the good times, preferring to use booming tax revenues to start or expand politically popular (and often costly) programs."

Another looming problem is the cost of paying government employees long after they have left their employment: "states have put aside a mere $11 billion to fund $381 billion in future nonpension benefits."