It's The End Of The World As We Know It, And I Feel Fine

Some people think global warming is upon us and that we're doomed. I don't really think so; at least, I'm not yet convinced that's true. What I am convinced is true is that both California and the US as a whole are going to go broke if our spending habits don't change, and the math on that subject is airtight--much more so than the "science" of global warming.

Several years ago, Governor Schwarzenegger tried to reform California's broken, underfunded, and overpromised pension system, and he got royally trounced. Interestingly enough, Governor Brown has just proposed some of the very same things Schwarzenegger did:

Gov. Jerry Brown will propose a higher retirement age and less-generous pension benefits for newly hired state employees, sources familiar with Brown's pension plan said Wednesday.

The Democratic governor, who plans to release his pension plan today, will also propose prohibiting the purchase of additional retirement service credit, or "airtime."

The plan, as presented privately by the Brown administration to labor leaders Wednesday afternoon, includes increasing the full retirement age to 67 for most new workers not in public safety jobs.

The increased retirement age proposal is more aggressive than expected, and labor interests, which poured millions of dollars into Brown's gubernatorial campaign, are likely to bristle at the prospect.

Brown's plan includes replacing defined-benefit pensions for new employees with a mandatory "hybrid" system combining a smaller, defined benefit, Social Security and a 401(k)-style benefit.

Though Brown's pension plan includes some of the same ideas he discussed with Republican lawmakers in failed budget talks in March, Brown was thought at the time to be considering the "hybrid" system only as an option for employees.

Unions pumped millions into Brown's campaign, I wonder how they'll handle this? Here's my prediction for the California Teachers Association: they wail about how this is the end of the world, and if it passes, they'll claim it's a wonderful compromise which shows how serious Brown and the Democrats are about putting the state on solid financial ground. They'll pump millions into his next campaign.

Of course, this may never come to pass. Brown, like his predecessor, is learning that he has to work with the Legislature, and a more dysfunctional organization can scarcely be found. They'll still pump millions into Brown's next campaign.

It's not just California that's going broke:

So, in order to prevent the debt situation from expanding, and depending upon which economist you trust concerning the multiplier effect, federal spending must be reduced to somewhere between $2,085 trillion on the high end and $1.344 trillion on the low end. And here are the current big-ticket items:

$761 billion - Social Security
$468 billion - Medicare
$269 billion - Medicaid
$598 billion - Unemployment/Welfare
$679 billion - Department of Defense + Foreign Wars

So, this is why the Tea Party and the Republican Party cannot possibly salvage the situation They're not proposing the end of ANY of these major programs even though the nation can only afford to keep two of them, three in the unlikely event that both Defense and Social Security are entirely junked. Since that's not going to happen, given the way in which the incompetence of politicians presently inhabiting Washington aren't willing to even consider such drastic action, the financial collapse of the US federal government is assured.

The numbers don't lie. And there's no unexplained/not-yet-understood science here to cause doubt.

Update, 10/28/11: And it starts:

Even as Gov. Jerry Brown announced his plan Thursday to reduce pension benefits for public employees across the state, its prospects of passing intact appeared dim.

California's powerful labor interests objected to major parts of the plan, and the leaders of the Democratic-controlled Legislature – neither of whom attended Brown's announcement – reacted warily...

Brown's record of legislative accomplishment does not suggest great likelihood of success. Republican lawmakers blocked his bid for a bipartisan budget deal and for passage of a tax and jobs plan this year.

Opposition to his pension plan is likely to come primarily from fellow Democrats.

Update, 10/29/11: Uh oh.

What about CalSTRS?

Despite two years of lobbying from the teachers' retirement fund, a plan to shore up CalSTRS' finances was missing from Gov. Jerry Brown's pension reform proposal this week.

The California State Teachers' Retirement System faces a long-term shortfall of $56 billion – the gap between assets and estimated liabilities. The fund has been quietly pushing a plan to increase taxpayer contributions, and has stepped up its campaign in recent weeks.