The state of California's real unfunded pension debt clocks in at more than $500 billion, nearly eight times greater than officially reported.
That's the finding from a study released Monday by Stanford University's public policy program, confirming a recent report with similar, stunning findings from Northwestern University and the University of Chicago.
To put that number in perspective, it's almost seven times greater than all the outstanding voter-approved state general obligation bonds in California.
Why should Californians care? Because this year's unfunded pension liability is next year's budget cut to important programs. For a glimpse of California's budgetary future, look no further than the $5.5 billion diverted this year from higher education, transit, parks and other programs in order to pay just a tiny bit toward current unfunded pension and healthcare promises. That figure is set to triple within 10 years and -- absent reform -- to continue to grow, crowding out funding for many programs vital to the overwhelming majority of Californians.
How did we get here? The answer is simple: For decades -- and without voter consent -- state leaders have been issuing billions of dollars of debt in the form of unfunded pension and healthcare promises, then gaming accounting rules in order to understate the size of those promises.
You mean the creative accounting techniques that landed Jeff Skilling in prison? Yet here we just call that bidness as usual.
What so "progressive" about a 500 BILLION dollar ponzi scheme?
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1 comment:
Look at any public fiscal crisis in this country and at the bottom of it is an overextended pension. Social security, state pensions, etc. This is a worldwide phenomenon. Greece's biggest issue is it's early retirement.
It's easy to see how it happens. Every private pension in the world is funded with past contributions of it's workforce. Every public pension is funded with current and future TAXPAYER contributions.
Any private company that has to borrow endlessly to pay retirees their pension is a company going bankrupt. Can you say gm? The public pension system is gm times 1000. It's borderline illegal. It IS a ponzi scheme. Where has the press been? I think they think bringing this to the front burner is going to hurt the poor little public pensioneer. It's much easier to blame the taxpayer for not wanting to pay for current obligations "for the children" than to explain to them that they have to pay more taxes to keep a good pension to someone who retired on a promise the taxpayer did not make. In reality the longer this goes unchecked, the harder the little guy gets slammed.
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