The public pension bomb continues to tick:
If union concessions, cost cutting, and higher taxes are not enough, then what? Inevitably, New Jersey and other states would turn to Uncle Sam for help. The pressure on Congress would be great. “How will they say no to state workers when they’ve said yes to bankers?” asks Marketti.
Even so, Congress might balk at opening the door to a series of multibillion-dollar state bailouts. In that case, we might well see a wave of municipal or even state bankruptcies as pension obligations overwhelm local budgets. To Leonard Lance, the pension blowup is one more consequence of the financial recklessness that defined an era. “In so many areas there has been inappropriate spending,” he says. “Now we all have to pay.”
Governments in spendthrift states, such as New Jersey and California, have to come to their senses, cut their excessive spending, their lavish pension plans, and unsustainable union wages. It is safe to assume that a major wave of municipal and state bankruptcies is bound to unravel sooner or later.
But until then they will of course continue to bleed the taxpayer for as long as they can. Expect them to introduce more and more “temporary” taxes and fees over the next months and years. (Of course “temporary” in government lingo always equals “permanent”.)
Californians do have the chance to send a message: Vote No on Prop 1A through 1E and Yes on 1F.