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Alabama is sixth best state in debt

According to a recent study, Alabama is sixth in America for the states with the lowest composite debt. Credit score experts at Creditsecrets.com analyzed public records from reliable sources to examine state and national debts, applying specific weights on a simple 0-100 scale to rank U.S. states with the highest and lowest debt levels combining consumer debt per capita with state debt as a percentage of GDP.

Alabama came in sixth, with consumer debt per capita at just $77,981 and a government debt ratio of 11.578% of GDP. Government debt in Alabama is $6,851 per capita.

Mississippi ranks number 1 with the lowest debt, with consumer debt per capita at $65,547 and government debt at just 9.882% of GDP, indicating a stronger financial position among U.S. states.

West Virginia secured second place with a consumer debt per capita of $64,320 and a government debt ratio of 15.064%.

Oklahoma was at third, with a consumer debt per capita of $75,022 and a government debt ratio of just 7.549%.

Colorado has the highest overall debt in America, with a consumer debt per capita of $154,481 and a government debt level at 12.76% of GDP.

Mississippi has total consumer debts of $192.7 billion and state government debt of $14.5 billion Credit secrets' experts gave Mississippi a 10 on their scale. West Virginia comes in second with a 14.1. West Virginia has $113.9 billion in consumer debt and $15.1 billion in state debt. Oklahoma has a 17.9 score, $304.1 billion in consumer debt and $19.4 billion in state debt. Arkansas has a 20.3 score, $229.4 billion in consumer debt and $20.3 billion in state debt. Ohio has a 22.5 score, $886.8 in consumer debt and $93.3 billion in state debt. Alabama has a 23.3 score, $398.4 billion in consumer debt and $35 billion in state debt. Michigan has a 25.1 score, $781.9 billion in consumer debt and $81.9 billion in state debt. Iowa is number 8 on the list with a composite score of 25.2, consumer debt of $259.6 billion, and $20.5 billion in state debt. Louisiana is at number 9 with a 25.7 score, $368.7 billion in consumer debt, and $31.1 billion in state debt. Rounding out the top ten is Indiana with a 26.7 score, $544.5 billion in consumer debt, and $52 billion in state debt.

States, unlike the federal government, have to balance their books so can't run deficits year after year. The federal government is able to create money by printing it which is also something that the states cannot do. While the state is nominally in better fiscal shape than the federal government, all the states are dependent on federal dollars for their Medicaid programs, public health, transportation departments, and even schools. The federal government also impacts state governments indirectly through their massive payroll, payments to federal contractors, and entitlement spending. Any significant reduction in federal spending could potentially negatively impact state budgets.

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