Now You Should be Really Fiscally Afraid in California

After reading a recent article I wrote about growing unfunded liabilities for public employee pensions and health care, a reader told me that it made him want to “burn his eyes out with red hot pokers.” Yes, the current situation – expanding debt, growing government, excessive pay and special privileges for government workers, thanks to union power – is not fun to read about. It can be downright scary, when one considers the financial mess that already is looming.

If you really want to be scared, you need to listen to the types of people who are now sounding the alarm bells. I’m a libertarian, and it’s not a surprise to hear me warn about the ill effects of government spending.

But listen to what former California Assembly Speaker Willie Brown, one of the state’s best-known liberal politicians, recently wrote in a San Francisco Chronicle op-ed:

"The deal used to be that civil servants were paid less than private sector workers in exchange for an understanding that they had job security for life. But politicians--pushed by our friends in labor--gradually expanded pay and benefits...while keeping the job protections and layering on incredibly generous retirement packages...This is politically unpopular and potentially even career suicide...but at some point, someone is going to have to get honest about the fact."

Democratic state Treasurer Bill Lockyer said at a legislative hearing: “It’s impossible for this Legislature to reform the pension system, and if we don’t it will bankrupt the state,”

The chief actuary for the California Public Employees Pension System called the current pension situation “unsustainable.”

This is from a recent Economic Policy Journal article: “According to the chairman of New Jersey’s pension fund, the US public pension system faces a higher-than-expected shortfall of more than $2 trillion.”

The only hope to rein in the current problem is for wider agreement that the days of enriching public employees must end. That means making inroads with liberal Democratic politicians, many of whom must realize that the future of other programs they support are imperiled by shaky finances and pension obligations that suck the life out of government budgets.

Steven Greenhut is director of the Pacific Research Institute’s journalism center and author of “Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives and Bankrupting The Nation.”