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For several months I have been on the radio and writing articles about the debt and deficits of the State of California. I have said the total is north of $500 billion.
For the first time this number is now openly being used by the media. Maybe the reason is that we are about to enter--in January or February--another phony special session to pass another phony budget. All this means is that Sacramento needs to borrow another $10 billion to keep it going.
"Lockyer's warning pertained to the state's "general obligation debt," which currently stands at $59 billion, and there are an additional $50-plus billion in general obligation bonds that have not yet been sold. The biggest chunks of debt, however, are the unfunded obligations for pensions and health care of retired public employees.
The latest annual pension report from the state controller covers 2006, when the unfunded liability was $64 billion. But since then, state and local pension funds have lost at least $150 billion on investments, so a reasonable estimate of today's unfunded liability is $200-plus billion. A state commission, meanwhile, says the state-local liability for retiree health care is about $100 billion."
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For the first time this number is now openly being used by the media. Maybe the reason is that we are about to enter--in January or February--another phony special session to pass another phony budget. All this means is that Sacramento needs to borrow another $10 billion to keep it going.
"Lockyer's warning pertained to the state's "general obligation debt," which currently stands at $59 billion, and there are an additional $50-plus billion in general obligation bonds that have not yet been sold. The biggest chunks of debt, however, are the unfunded obligations for pensions and health care of retired public employees.
The latest annual pension report from the state controller covers 2006, when the unfunded liability was $64 billion. But since then, state and local pension funds have lost at least $150 billion on investments, so a reasonable estimate of today's unfunded liability is $200-plus billion. A state commission, meanwhile, says the state-local liability for retiree health care is about $100 billion."
The total? "There are tens of billions in specialized state debt, such as veteran home loan bonds, "securitization" of tobacco lawsuit proceeds, and budget deficit bonds.
The interest that must be paid on all that state and local debt is probably an additional $100 billion, so we're already talking about well over $500 billion."
Actually it is more! "Then there are the off-the-books debts incurred to paper over years of state budget deficits, such as speeding up tax collections that will have to be refunded later, postponing periodic payments to schools, making promises to schools about levels of future financing, borrowing money from special funds and taking local government funds that must be repaid later."The interest that must be paid on all that state and local debt is probably an additional $100 billion, so we're already talking about well over $500 billion."
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