4 ms·
The debt (read: accumulated past deficits) isn't the only, or even main, issue; rather it's the future liabilities that are killers. For example, California ha
by ataggart 16y ago
The debt (read: accumulated past deficits) isn't the only, or even main, issue; rather it's the future liabilities that are killers.
For example, California has unfunded pension liabilities of over $500 billion [1]. To put that number in perspective, it's almost seven times greater than all the outstanding voter-approved state general obligation bonds in California.
[1] http://www.stanford.edu/group/siepr/cgi- http://www.stanford.edu/group/siepr/cgi- bin/siepr/?q=/system/files/shared/GoingforBroke_pb.pdf
- jerf 16y agoThis is the core of the problem. My problem with this article is that you can apply the same arguments and paint a picture where the US itself has a rosy economic future. But the problem isn't even merely today, November 29th, 2010, it's the scope of the future obligations we've taken on. It's not that the US or California has necessarily that exceptional of a debt load right this second, it's that the money we might be using to service it is already nominally allocated to other "untouchable" projects. That's the big change; entitlements (and pensions as a subset of those worth calling out specially). To do an article about how glorious the California future is and to criticize not just the arguments but the motivations of those saying there are problems, but for neither the word nor the concept of entitlements to show up is just constructing a straw man and cherry-picking the budget numbers. For that matter reading the article straight you might be mystified about why California has very recently resorted to the very legally-dubious IOU-money-but-not-quite-money scheme. If it was even half as rosy as this guy is arguing that shouldn't have been even close to necessary, but in the real world, it was.