Welcome to Money for the rest of us. This is a personal financial note on money, how it works, how to invest it, how to live without worrying about it.

I'm your host David Stein. Today is episode 185 and it's titled Are U.S. States

just like Greece? Illinois, the state of Illinois is the fifth largest economy in the United States and the

18th largest worldwide. Per capita GDP is over $54,000. And the amount of output per person in Illinois is over $54,000.

And the economy has expanded by over 11% since 2012.

And the banks there are doing well.

Overall, the banks in Illinois

have non-performing loans as a percent of their total loans of only around 1%.

Unemployment rate is roughly 5% and the economy's big, 850 billion dollars in output. But there was some

challenges in Illinois this year. The state legislature failed to pass a budget for the second year.

This was in May of 2017, and the state owed over $15 billion in unpaid bill. Their debt was

downgraded to just above junk status. So Moody's in S&P about triple B minus, they have massive

pension liabilities that are unfunded.

The three largest pension plans have about $136 billion of unfunded liabilities.

And the market for their bonds took notice.

At one point the taxable, so not tax exempt, but the taxable general obligation bond for the state of Illinois

due in the year 2035 was yielding over 7% and the tax-exempt bonds, the 10-year tax-exempt bonds were yielding over 5%.

Now right now things have settled down. They were able to finally pass a budget but tax exempt bonds 10-year bonds in

Illinois still yield about 4% and on a tax equivalent basis if you're in a 25% tax bracket that's about a 5.3% tax

equivalent yield. So that's Illinois. Had some struggles, has some challenges, but still economies

growing. But their debt, yielding about 5% on a tax equivalent basis, 4% tax exempt. Let's compare that to Greece. Well first

let me step back. The overall amount of debt in Illinois is $62 billion.

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