Americans should avoid any feelings of smug superiority about the problems in Europe’s periphery. It’s time for the U.S. to be worried about its “own peripheries”, according to the Financial Times. This FT report talks about underfunded pensions and state and local debt in the same terms it has used for Greece and Portugal.If the report is correct, the problems are truly enormous. Some estimate that state and municipal bonds are underfunded by $4 trillion, while other experts believe that this is only the tip of the iceberg. Worse, the true level of these pension liabilities is shrouded in secrecy; until very recently, the SEC hasn’t put pressure on states to tell bondholders the full extent of their liabilities. Many states have been reluctant to come clean, and even when they have complied with SEC demands, their assessment of their ability to pay is hopelessly rosy and based on outdated assumptions about investment returns.Private sector executives would be jailed for securities fraud if they even approached the levels of deceit that state and local governments routinely indulge in. Transparency in accounting should be the first demand of both citizens and investors. Hopefully the SEC will keep up the pressure on these governments to reveal the true state of public finances, before America gets dragged into a European-style debt trap of its own.