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Waiting for the shoe to drop

There is a dirty phrase being ignored by too many politicians...."unfunded liabilities".
There is a dirty phrase being ignored by too many politicians...."unfunded liabilities".
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The Bible declares “when the righteous rule, the people rejoice…but when the wicked rule the people mourn”.

There are a ton of sayings in the Holy Scriptures dealing with heaven and hell, however few people realize that there are even more scriptures dealing with finances and personal property. Even Jesus spoke much more about managing your finances more than speaking about heaven or hell.

“Counting the cost” is a warning not only for spiritual issues and what a believer can expect to happen when one goes down the road of adhering to God’s standards, but one should also be aware of the cost of long term financial commitments.

“The borrower is a slave to the lender” is a warning from Proverbs 22:7 about not only counting the usury which is the interest rate charged for borrowing money, but future obligations one promises to pay….which brings us to the financial insanity that reigns in the California.

Reinventing word meanings is a tactic that is now quite common, particularly when one discloses about finances.

Politicians are redefining the principles of accounting and debt in order to temporarily look good to their constituents or public. There are little lies that are expected from politicians which plays to the old joke of, “How can you tell a politician is lying?”…..are his or her lips moving?

However there is lying that are whoppers and there is no other bigger whopper being perpetrated than the one regarding how much California owes in debt. A better question is not how much do the current California residence owe, but how much to our children owe?...and children’s children?

There is a new deceptive procedure in reporting debt by not counting the debt owned the next year and the next. There is a phrase bringing economic devastation to American cities as Detroit, Stockton, and Vallejo and California will sink as surely as the Titanic if the politicians do not start dealing realistically with unfunded liabilities.

California is selling its future to the pension plans that cannot be paid now or later. Spending more money than what you take in ALWAYS catches up with you without sensible action.

Unfortunately this recipe for sure bankruptcy is being ignored not only by our California government who are committed more to their corny unions than the California people, but our leadership in the Golden State is committed to pretend these huge deficits are not even there. The things done to hide the true nature of our debt would be criminal activity for any other business owner doing the same thing in our state.

The “love of money” is the root of all evil as stipulated in the Bible, and the love of ongoing campaign funding and political donations is trumping the general welfare of the people of California. Our media, which is suppose to be the watchdog of the public interest, is in bed with their favorite political agendas still worrying about what President George Bush did. One just cannot upset the gravy train.

The proverbial act of kicking the can down the road is going to be shocker for somebody else to worry about in the future, however that future could well take place sooner than what most people believe.

The ugly truth is being discovered by the United States Postal Service which has currently expenditures where every $1 of revenue has around 93 cents going to employee compensation costs. You can well expect red ink of billions of dollars to increase exponentially as employees retire and begin cashing in the unfunded liabilities guaranteed for the future.

A more healthy revenue eater in personnel costs should be a little below 50 cents on the dollar. It may vary based on your industry, but any CPA worth their salt would tell you it is impossible to exist in the real world with 93 cents of every dollar going for employee costs. That is in the real world anyway....many spend thrift politicians live in Fantasyland.

There are many other cities as Baltimore that is in horrendous financial shape due to the plague of unsustainable debt. The only reason Baltimore has not declared bankruptcy is because it is illegal for Baltimore to do so.

The City of San Jose is on a bankruptcy watch list for unsustainable debt. The mayor of San Jose Chuck Reed sponsored a measure on the ballot which was approved by 70% of the voters to reel in city employee compensation debt, but some unions sued to keep the trough open for their pleasure. The media has been basically useless about reporting the reality of the debt.

The unions have a similar lock on the politicians in the California legislature. Unions have poured millions of dollars into the coffers of their favorite politicians knowing they will get billions back in return, and that is exactly what is happening.

Proof of the insanity is to compare what the politicians in California loudly declared by pontificating about $1.6 billion going into a rainy day fund for the future when the spending total according to the State Budget Department is around $156 billion. If the $1.6 billion is for a rainy day, we better start thanking God for the drought.

Remember also when there was all this noise articulated about $150 million being contributed by the State Budget to unfunded liabilities? The State reported in May of this year that there is a total of over $218 billion dollars of total unfunded pension/health liabilities. That dorky $150 million trumpeted will not even pay a month’s of interest.

One ought to be thankful that these characters are not running our banking system…..wait a minute, yes they are.

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