The news just keeps getting worse for California and the U.S. economy. Reports indicate that mounting debt created in Sacramento and D.C. by both Republican and Democratic representatives is about to explode.
Dan Walters of the Sacramento Bee wrote recently that, “The Legislature’s budget analyst, Mac Taylor, estimates that California has more than $200 billion in liabilities that will affect the state’s financial health. And this doesn’t even include the local debt of cities, counties, special districts and redevelopment agencies.
“The $200 billion in state debt includes about $35 billion in budget related liabilities — read this as budget tricks used to paper over the deficit; about $69 billion in bond debt that must be repaid from the general fund; and more than $100 billion in unfunded liabilities for government employee pensions and health care.
Meanwhile, David Walker, the nation’s former auditor-in-chief while head of the Government Accountability Office (GAO), told the National Taxpayers Union that America suffers “from a fiscal cancer.”
“Our off balance sheet obligations associated with Social Security and Medicare put us in a $56 trillion financial hole—and that’s before the recession was officially declared last year. America now owes more than Americans are worth—and the gap is growing!”
According to Walker, “Our $56 trillion in unfunded obligations amount to $483,000 per household. That’s 10 times the median household income—so it’s as if everyone had a second or third mortgage on a house equal to 10 times their income but no house they can lay claim to.”
As just for this year’s deficit of $1.8 trillion, Walker brought it down to more understandable terms, “A deficit that large is $3.4 million a minute, $200 million an hour, $5 billion a day.”
Oh, and what about the next bailout, the FHA?
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CALIFORNIA’S UNFUNDED DEBT FOR STATE RETIREES HEALTHCARE WILL ONLY GROW IF OBAMACARE IS PASSED
The silence from State Unions and Retiree organizations is shocking because they are supporting OPbamacare, a path to distristruction of one of the CalPERS Health Insurance program, one of the best around. Every enrollee in any of the CalPERS Health Insurance programs should get on the phone today to Senators Feinstein & Boxer as well as their Congress member and say no to Obamacare.
Providers and Insuerers (even self insurers like CalPERS in part) cannot absorbe the cost shifting from an enlarged Medical program which reinburses at 30% of actual cost) Medicare without a Supliment (which reinburses at 80% of actal cost or a new Exchange or Cooperative version of a publib plan which would reiburse at 80% of actaul cost.
Obama does not seem to know the Kaiser, Blue Shield & others are not for profit and many like CalPERS have in part self insured plans now.
Like CalPERS and AARP plans do now we need to eliminate denial of coverage for preexisting conditions or a bad experience the prior year. We also need interstate competition and new small business trade or professional pools that can self insure or but insurance for large groups. Teachers do this in California with the Cental Valley Trust, Cities do it thru CalPERS and seniors thru AARP.
Kurt Hahn, a California hospital board member
Would be interesting to see how it compares to other country’s liabilities. For example, the Canadians have a reputation for far more health care responsibility than us as well as greater pension benefits/social security and they have maintained it for decades longer than we have for what is a minor amount. Is that an illusion, are they in their disaster mode as speak or is something missing in the equation here?