CAR: Well… If you’re going to start bringing facts and stuff into this…
Kidding aside, I will certainly concede that you have plenty of evidence. However, that said, there is no debate that we’re looking at significant budget deficits (and, no, I’m not laying this solely at the feet of the unions), as well as looming and massive shortfalls in the state pension program. These unfunded liabilities absolutely dwarf the state’s ability to pay, and will have material consequences (i.e. they will crowd out essential services as they grow larger over time).
So, while the unions are making concessions, we arrive at the point of, are the concessions enough? Morever, it also appears that organizations like CalPERS made overly rosy assumptions regarding investment returns and that cities and municipalities spent to their level of revenue during the boom times, leaving us utterly unprepared for the bust that followed.
What to do? From an accounting perspective, we’re essentially insolvent as a state, and have been using accounting gimmickry, financial sleight-of-hand, and outright bullshit to cover up the fact that we can’t meet our obligations. California’s bond rating amply illustrates what investors truly think of us, and I would imagine its even worse at the local level. Simply put, we can’t pay our current bulls, we’re even worse off when considering the bills in the near term (next 2 to 5 years), and we’re totally screwed when it comes to meeting future obligations, especially pension and long-term benefits guarantees.
I’m not saying I have an answer, because I don’t, but I think tying spending to REALISTIC revenue targets is a start, and minimizing our debt load (especially as it relates to all of those friggin’ bond issues) is the next step.
