Final answer:
States might be upset at the federal government for paying off their debts due to concerns over federal overreach and unfair taxation of states that had already paid their debts.
Step-by-step explanation:
The states may have been upset at the federal government for paying off their debts because it involved a fundamental debate about the balance of power between the federal government and the states. Specifically, James Madison and other leaders from states like Virginia, Maryland, and Georgia, which had already paid off their debts, felt that the federal government taking on state debts would unfairly tax their citizens to pay for the debts of other states like Massachusetts, Connecticut, and South Carolina.
Furthermore, this plan, known as the assumption of state debts, was seen by some as a potential overreach of federal power and raised concerns about states losing their financial independence or having to give up too much of their independence to a central authority.