San Bernardino and Need for Limited Government

As California continues to implode, with San Bernardino being the latest city in the state to declare bankruptcy, it underscores the need for the paring back of the size of government and the outrageous benefits provided for its union "workers" that the productive private sector must shoulder.

But since the productive people can no longer prop up the parasitical government workers, and the municipalities refuse to cut back on the size of government, or to make the workers pay for part of their benefits like Wisconsin Governor Scott Walker made them do, they have no option but to declare bankruptcy, as they don't have the integrity or courage to make the needed cuts they must make for the cities to survive economically. We'll see a lot more bankruptcies in California before it's over.

Here's what San Bernardino's mayor Patrick J. Morris said was the source of the debt problem: it is from the "unfunded liabilities related to pension and benefits" for the city's workers, and "obligations to employee groups in labor contracts."

In other words, similar to Europe, they are overpaid workers that the city cannot afford to pay. It's as simple as that, and it comes from the outrageous pay and benefits which are far above the market rates which the free market, private sector pays.

This has already wreaked havoc in Stockton, another California city which has declared bankruptcy, where bond insurer Assured Guaranty has offered complaints concerning the fact that the city is reneging on the debt obligations owed bond holders while it continues to make payments to CalPERS, the state pension system.

In the latter part of July San Bernardino said it owed $56 million from its general fund, of which $50 million was a pension bond.

Another $195 million in in unfunded pension obligations pension obligations is owed by the city, along with "$61 million in unfunded retiree healthcare, $40 million in workers compensation, compensated absences and general liabilities."

Most state and local governments refuse to take the required austerity steps of reducing the size of government, which is the major part of this problem, as is paying wages and offering benefits that are unsustainable to public workers and the private and productive sector that is forced to pay for them.

Thankfully this is all slowly coming to an end. Unfortunately, instead of dealing with the problem, which would be an admission that big government cannot and will not work over time, it's being swept under the rug and not faced by bureaucrats who can't admit giant government has failed.