Dan Walters: California debt may be half a trillion dollars

Sacramento Bee ^ | 11/29/9 | Dan Walters

[SmithL]

Just days before Gov. Arnold Schwarzenegger and legislators finalized a water package, including an $11.1 billion bond issue, state Treasurer Bill Lockyer warned them not to do it.

California is already deeply in debt, Lockyer warned, has huge budget deficits and can't afford another big bond issue.

"The days of blithely heaping more and more debt burden on the general fund are over – at least they should be," Lockyer said.

The earmark-laden bond issue, the package's single most controversial element, raises an interesting question: Just how deeply in debt are our state and local governments?

The answer: No one knows for certain, since debt is scattered through myriad agencies in many forms, but well over a half-trillion dollars is a fair estimate.

Lockyer's warning pertained to the state's "general obligation debt," which currently stands at $59 billion, and there are an additional $50-plus billion in general obligation bonds that have not yet been sold. The biggest chunks of debt, however, are the unfunded obligations for pensions and health care of retired public employees.

[rbosque]

They have been issuing bonds lately. It’s all worthless paper.

[cherry]

it has everything to do with govt pensions, paychecks, and medical benefits....

[Thermalseeker]

One of the problems is that the mass transit systems keep trying to operate as social experiments.

This particular train system being proposed would be inter-city, between LA and San Francisco. These never work without heavy gubmint subsidies because the cost of building and maintaining it far, far outweigh the cost and benefits of transporting a few hundred people at a time. Flying is cheaper and much, much more cost effective. There simply is no comparison when you look at the real cost per mile of travel per passenger.

Otherwise, I would agree with your comments. Atlanta has tried the same thing with MARTA, i.e. the Metro Atlanta Rapid Transit Authority. I rode the "M" train every day for about 4 months shortly after I got out of grad school to a job I took in downtown Atlanta. There was no parking in downtown Atlanta that was affordable and the traffic is horrendous. After witnessing a shoot out between gang bangers at the Five Points Station one afternoon on the way home, I decided riding the "M" train to save on parking and traffic tie ups really wasn't worth risking my life over.....