George Rebane

The unfunded public pension disaster is picking up speed.  Municipalities are beginning to eye how to file Chapter 9 bankruptcy. The public employee unions in California are determined to keep milking the dying cows to the very end by trying to pass a law that (fasten seatbelts) would make it illegal for municipalities to declare bankruptcy without union approval. 

A couple of letters to the editor (here) in the 16jul09 WSJ contain a candid view of the unions’ motivations in underestimating the unfunded liabilities that will hit their memberships’ benefits, and a flakey response by the union backed National Association of State Retirement Administrators.  The latter live in a la-la land where cities can raise unlimited monies to keep their pension plans funded and current, and where real world concerns about running out of cash are “irrelevant to public pensions because they and their sponsoring entities are going concerns, not subject to takeover or going out of business.”  Oh yeah?! watch Vallejo.

Regular RR readers will not be surprised as this tragi-comedy unfolds, but they will be updated and informed as we continue looking at how public employee benefits are negotiated, calculated, managed, and distributed.  It will not be a pretty picture, and it’s happening all over the country.  So what you read about happening in one far-off jurisdiction, is probably also happening closer to your own wallet.

BTW, all this is in addition to the stuff coming out of Washington.  No level of government will be left behind in requiring you to pay your ‘fair share’ of the cost of their mistakes while we were too busy to keep an eye on them.

[update]  Here’s little graphic for those who want to see them foreigners walk the walk.