brief article in this week's Forbes
explores the mounting debt crisis facing state, local and national governments
worldwide; the title suggests one possible cause, "The Economic Incompetence of
The Political Class." One startling factoid: The city of Chicago's unfunded
pension liabilities are $25 billion, or $40,000 for every city
comparison, the nominal unfunded liability figure for Michigan is around $50
billion, but this falls to just
$11.5 billion after deducting the "politician promise" of state
retiree health benefits that taxpayers are not legally obligated to pay.
Michigan has more than three times the population of Chicago.
The blame here and elsewhere ultimately falls on citizens who enabled
politicians to rack up the massive liabilities, and the piece aptly describes
the false assumption at the root of this and countless other government
In the U.S. at least, the looming debt crisis
among states and municipalities also reflects a lack of diligence on the part
of the citizenry. This can be attributed in part to a naïve assumption by
the electorate that those in government, freed from the profit motive, could be
trusted to do what was 'right' for the community as a whole.
Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.