States' Deadweight Ratios

The traditional measures of credit risk in state and city bonds are the ratings from Standard & Poorâ??s and Moodyâ??s, budget deficits, outstanding debt  and pension underfunding. These measures are all valuable to investors. But they are only symptoms of the disease. The structural problem is that government has too many mouths to feed. Itâ??s possible to quantify that problem. The result is a metric that I call the Deadweight Ratio.