Jerry Brown's $ 28 billionbudget gap in California turns out to be a mirage. Brown considered the $ 28 billion number a crisis for California, when he strode into the Governor's mansion. A blue ribbon committee founded by Democrat and Obama advisor Paul Volcker has studied the budget gap in California and come up with a different number, or should I say, a range. The outcome of that study is discussed in today's New York Times in an article by Mary Williams Walsh. The actual California budget gap, according to the Volcker committee is somewhere between $ 167 billion and $ 335 billion. Ooops!
Even this is a dramatic understatement of California's plight since the combined unfunded liability of CALPERS, CALSTERS, and the nine largest county pension funds in California is well in excess of $ 1 Trillion, which is a multiple of the assumption being used by California's state government in assessing the budget gap. So, the committee is trying to be California-friendly. But, heck. A trillion here, a trillion there. After a while, you're talking about real money.
Meanwhile, Brown and the California legislature have tacked on many new job-killing legislative initiatives that keep California in the economic doldrums. California is currently in a race with New York to see who can lose the most wealthy citizens, fleeing exhorbitant tax rates.
So, what is the future for California? How's Greece doing these days?