The reason you haven't heard much about this problem is that nobody in Sacramento wants to admit to it. But, the fact is that every household in California owes $74,000...just toward covering the looming costs of state employee pension funds. That adds up to about $1 trillion. And that figure already takes into consideration what they expect to have in future pension fund contributions.
The reason we don't know about it is an accounting trick called "unfunded liabilities." That means they know they're going to have to pay it out, but they're not going to put it on the books until it becomes due. That's somewhat akin to buying a $2,000 large-screen TV and pretending you don't owe anything for it until you get the credit card statement.
Will the feds bail us out? Do we qualify as being "too big to fail?"
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