Dangerous Financial Pressures on Government
Authorities Threaten Our Futures
You see, America’s dangerously overextended public-sector is quite literally papering over a solvency crisis of epic proportions. There are gigantic financial pressures on federal and state officials driving them to desperation.
Consider just this one slice of the government’s little-understood funding pickle:
On the state-level alone, Uncle Sam is looking at a multi-trillion-dollar bailout of public employee pensions. More specifically, federal bureaucrats know that a major bailout of total state-level pension obligations is coming. That’s because there are an astronomical $5.7 trillion in pension obligations against only $1.94 trillion in actual holdings.
Northwestern University economist Joshua Rauh recently calculated 50 states’ pension obligations by removing the rigged statistics governments use to make their pensions appear solvent. Rauh learned that in addition to horrific operating deficits, state government pension obligations are (on a national level) a whopping three times greater than their rapidly collapsing reserves.
Desperation moves by states foreshadow what is to come. Cash-strapped Colorado tried, unsuccessfully, to grab $500 million from a newly-privatized pension fund. Connecticut has tried to issue creative new accounting rules to camouflage its insolvency. And the State Supreme Court of New Hampshire recently ordered state officials to return $110 million they “borrowed” from a medical malpractice insurance pool.
As the old saying goes, the problem with socialism is that you eventually run out of other people’s money. Now that horrific moment appears to have arrived. Governments at all levels are running out of cash.