"By the time the Government Accounting Standards Board nudges state and local governments into being honest about what taxpayers really owe on pensions, it will be too late. So bond lawyersare gearing up to force transparency sooner.
Why? Because their clients are at risk and have no way of knowing how big that risk actually is. The only thing they know is somebody — public workers, taxpayers, bondholders, the poor, the young, the old, the sick — has to take a huge hit. Soon.
State and municipal governments simply cannot pay the debts politicians racked up during at least two decades of profligacy and accounting lies.
The biggest debt is for retirement benefits promised but not paid for and hidden off balance sheets with at least three layers of false bookkeeping that would land any person or private business executive in prison.
That unavoidable debt is at least $1.26 trillion as of 2009, according to a Pew Center on the States study released earlier this year, but probably more than $3 trillion and growing every day because politicians refuse to fix it.
That is more than the total official debt state and local governments are paying off now.
A Congressional Budget Office study released in May explicitly states that as of 2009, “By any measure, nearly all state and local pension plans are underfunded, which means that the value of the plan’s assets is less than their accrued pension liabilities for current workers and retirees.” And that’s using the bogus numbers.
Proposed GASB rules released Friday would begin to show the real numbers, but would not take effect until Fiscal Year 2014. For the lawyers who do municipal bond deals, that is not fast enough"...............READ MORE
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