Here is a report on the awful state of state budgets, with some details that will trouble.
Consider that the unfunded pension liabilities (inadequate investments to pay the obligations) for the states are approaching 5 Trillion and the debt of the states adds another trilion.
http://www.humanevents.com/2014/01/14/report-state-debts-top-5-trillion/
Cory Eucalitto at Statebudgetsolutions.org provides a longer and more detailed report. This is enough to require oxygen and antiemetics for any thoughtful citizen who understands that certain rules must prevail in sound budgeting to avoid collapse.
The ground breaking writers on these pension things include are Rugy
http://www.nationalreview.com/corner/257412/states-real-liabilities-veronique-de-rugy
and Novy-Marx and Rauh from Chicago.
https://www.aeaweb.org/articles.php?doi=10.1257/jep.23.4.191
Here’s why the pension managers get goofy.
http://www.forbes.com/sites/danielfisher/2013/02/10/want-to-make-that-public-pension-look-healthier-burn-the-cash/
Don’t people remember how big debt always got solved in the past–inflationary monetary policy? That destroys the economy.
Quantitative Easement is fancy inflation–at 85 billion per month in the recent past–that’s 85 thousand millions or 1020 thousand million per year.
Read Henry Hazlitt Man v the Welfare State or any sensible economist and stay away from all the Keynesians–they are delusional about inflation. There is no free lunch, and debauching the currency coupled with borrowing and debt is not the way to prosperity.
The public pension shortfall was created in two major ways:
1. Failure to require public employees in many states to adequately contribute to pensions; many social security recipients paid a lot more in than public employees – for a payout that is miniscule by comparison;
2. Increasing pension benefit formulas went way beyond anything conceived when funds were set aside years ago.
There needs to be a cap on what a governmental employee can get as a yearly pension. It can be a high cap – say $100,000.00. That would still save a huge amount of money nationwide as there are many who collect much more than that.
In this way, the average government worker will not be affected, but the obscene amounts paid to others would be reined in.