We just saw an estimate telling us that by the end of Obama’s term the US will be spending a third of its tax revenues just to service its debt. Not at Japanese levels yet! But getting there. And after Japan bondholders go “over the cliff” maybe lenders won’t be so ready to follow the US over the edge too.

The US ratio of debt to GDP is very much in the range of all the mature economies – between 60% and 80% of GDP; not at Japanese levels either, yet. But wait. In the US, unlike say, France, state and local governments have their own debts, independent of the national government. How deep in the hole are the state and local governments? Truth is, nobody knows. The states report their liabilities in strange ways, often ignoring accounting conventions.

Just reading the paper gives you an idea of the problem. California faces a $19 billion shortfall this year. Jerry Brown is going to take the bus to work. That will save some money. Only $18,999,999,900 left to cut.

New Jersey’s public pension system is $100 billion in the hole. New York’s system may lack almost twice that much.

Illinois spends twice as much as it gets in taxes.

What’s the total damage? We’ve seen various estimates. The number that sticks with us – probably because it is easy to remember – is $1 trillion. The other calculation that sticks in our mind is this: add state and local debt to national debt and you get a total as large as that of Greece – at about 130% of GDP.

Of course, we’re only talking about OFFICIAL debt. Even that is a very squirrelly number. The Obama administration, for example, says its Obamacare program will result in trillions of dollars worth of SAVINGS to the US government. Do you believe that? You do? How about this – we’ll give you 50 cents for every dollar Obamacare saves the nation if you’ll give us 25 cents for every dollar it ends up costing the nation. Deal?

There are also the unfunded liabilities and off-balance sheet debt. Those estimates too are all over the place. Professor Laurence Kotlikoff estimates the total US off-budget and on-budget debt at more than $200 trillion. Another calculation, cited by our friend Dylan Grice of Société Générale, puts total US on-and-off budget debt at just over 500% of GDP. Curiously, comparing the US official and unofficial debt totals to other mature economies shows that the US is most like…

…France!

Both totals – official and unofficial – are at about the same level.

Which surprises us… We thought France was in better shape.

Oh well… If we go to the poorhouse together, let’s get the French to do the cooking!

Bill Bonner is the President of Agora Publishing. For more on Bill Bonner, visit The Daily Reckoning.