Muni sweeps: Fiscal kabuki

April 26, 2011

Fiscal kabuki is frightening. From the Washington Post’s Ezra Klein:

“If the president doesn’t get serious about the need to address our fiscal nightmare, yeah, there’s a chance it could not happen,” John Boehner told Politico.

“It,” in this case, isn’t a golf game, or a bipartisan potluck. It’s a vote on the debt ceiling before the Treasury runs out of room to cover our debts.

Properly understood, what Boehner actually said is “if the president doesn’t get serious about the need to do what the Republican Party wants on fiscal policy” — note that allowing the Bush tax cuts to elapse would cut the deficit substantially, but wouldn’t calm Boehner — “yeah, there’s a chance I am prepared to trigger a fiscal nightmare.”

Awake yet?

More fiscal bad dreams.

From Reuters:

States are short $1.26 trillion in paying for public employee pensions and other retirement benefits, a gap that grew 26 percent in one year and will take many more years to wipe out, according to a report released on Tuesday.

A total of 31 states had pensions that were underfunded in fiscal 2009, the latest year for which data is available, up from 22 states a year earlier, the Pew Center on the States reported.

Actually this number is coming at the lower range of projections. Some had estimated the national public pension shortfall at $3 trillion. It’s all relative. The Bond Buyer’s take on “The Gap”. And a link to the Pew Trusts report from the Bond Buyer.

Some benefit truants

More reporting from Reuters on the Pew Trusts study. Here is the state by state data for shortfalls for public employee benefits other than pensions. Think health care and life insurance.

  • Arkansas – $1.87 billion
  • Connecticut – $26 billion
  • Florida – $3.74 billion
  • Hawaii – $10.8 billion
  • Indiana – $525 million
  • Iowa – $538 million
  • Kansas – $237 million
  • Louisiana – $11.5 billion
  • Minnesota – $1.14 billion
  • Mississippi – $728 million
  • Montana – $541 million
  • New Jersey – $66.8 billion
  • New York – $56.3 billion
  • Oklahoma – $360 million
  • Rhode Island – $788 million
  • South Dakota – $67.1 million
  • Tennessee – $1.75 billion
  • Washington – $7.62 billion
  • Wyoming – $174 million

SOURCE: Pew Center on the States

Little sweeps:

New York Times: Public Pensions, Once Off Limits, Face Budget Cuts

Business Insider:  SoCal city edges closer to bankruptcy to deal with its huge fiscal mess

The Journal: California School District To Save $12 Million with Solar Power


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Interesting that the author omitted the fact that Obama’s 2009 $787 Billion stimulus plus a $400 Billion omnibus bill that year (both loaded with huge amounts of pork for Democratic districts and Democratic campaign donors) totaled to an unprecedented amount of spending that apparently Obama thinks should be the new norm. Talk of cutting spending from that high-water mark gets labeled as “extreme” by the liberal press, when, in fact, taking us back to 2008 spending levels would go a long way towards reestablishing some fiscal sanity.

Posted by Realist99 | Report as abusive

Sometimes I think we’re doing the old “I’m going bankrupt soon, so I’ll just run out and buy as much as I can now in hopes of keeping some of it.”. Unfortunately the banksters figured that one out a few years ago and changed the bankruptcy laws. I think the world economy has figured it out too.

Posted by tmc | Report as abusive