October 31, 2012

WALTER RUSSELL MEAD: CalPERS Goes After Compton. “California’s pension crisis is metastasizing. Last week we noted that the California public pension fund CalPERS was at loggerheads with the city of San Bernardino, which was using its bankruptcy filing as grounds to default on its obligations. This week, CalPERS sued the city of Compton, which owes $2.6 million to the fund. One detects its desperation here. . . . Spin it as you like, but math wins in the end. California’s retirement numbers just don’t add up, and clinging grimly to failing policies and dying institutions is not the way forward. CalPERS can sue every city in California, but that won’t fix the pension crisis — and it won’t get the California economy on track for the kind of growth that would make the tradeoff between pensions and services a little less dire.”

Something that can’t go on forever, won’t. Debt that can’t be repaid, won’t be. Promises that can’t be kept, won’t be.