California ignores the truth
Anyone who has dealt with a loved one deeply involved in some destructive behavior understands that there is only so much you can do until the person hits whatever low point is necessary to spark a commitment to turn around their life.
I think of my beloved California in the same light. What a great state, but it remains on a collision course with reality. Eventually, the fiscal self-destruction has to stop — and adults have to step in with an intervention to save our state from its dangerous path.
The Tech Ticker website recently reported that “municipal bonds have plummeted in recent days, as investors have suddenly focused on huge state and city budget deficits that there’s no easy way to fix. Nowhere has this collapse been more visible than California.”
The financial industry analyst quoted in the story predicts that the state will eventually default on its debt — yet another sobering thought in a state desperately in need of sobriety.
Meanwhile, California’s pension debt is estimated to be as high as a half-trillion dollars, the state’s unemployment fund has gone upside-down and a new Stanford report pins local pension debt at $200 billion. Yet the state’s spending addicts treat those who try to help them as troublemakers.
In San Francisco, for instance, The City’s political establishment and public employee unions spent millions of dollars smearing a modest proposal by Public Defender Jeff Adachi that would have required increased contributions by city workers to pay for their generous pension and health care plans. Had Proposition B passed on Election Day, San Francisco would soon have an extra $120 million annually to use toward closing its budget deficit, but voters rejected it by a 57 to 43 percent margin.
But after three weeks of gloating, city officials and union leaders must face some harsh reality. On Nov. 17, Moody’s Investors Service downgraded to Aa2 from Aa1 the rating on San Francisco’s general obligation bonds. Moody’s pointed to The City’s lack of a sufficient reserve fund and its gaping budget hole, but also to the failure of Adachi’s initiative — “[T]here are no indications that there is the political will or practical ability to bridge this still very large [budget] gap in a structurally sound manner. In fact, in the recent election voters defeated Proposition B.”
The good news is that even the unions are paying lip service to pension and health care reform following the Moody’s announcement.
“We took an issue that’s a complicated one and brought it into the public debate and dialogue,” Adachi told me, explaining that reform is still possible.
He is working on a new initiative and talking about a more aggressive campaign next time.
Adachi understands the dire financial consequences of ignoring this problem, and wants to keep explaining it to San Franciscans in a way that resonates with their progressive politics — namely, that refusing to fix the problem will result in massive layoffs and the depletion of the public services they value so highly.
Adachi has not received anything but guff for his efforts to tell the truth, but, then again, how appreciative is that loved one while they are still on a bender?