Few years ago, a little unknown accounting rule was enforced across America’s state and local municipalities. This rule was not welcomed to say the least because it made government money handlers follow the same accounting rules of present and future liabilities that business has to. The results have not been pleasant financially for taxpayers. For numerous decades, states and local municipalities have practiced shady accounting technigques to hide debt.
Breitbart.com picked up on this in an article about San Francisco city workers pensions facing major shortfalls:
But when the Governmental Accounting Standards Board (GASB) issued Statements 67 and 68, which required greater public pension liability disclosures by mid-2015, auditors calculated that the national unfunded public sector pension liability for state and local governments had jumped by almost 50 percent to $1.378 trillion. In a surprise to ultra-liberal San Franciscans, their unfunded pension liability spiked to $5.8 billion.
Stanford University’s Hoover Institute has commented that if public pensions had to follow the same equivalent market valuation basis analysis as the private sector, the “true” public sector unfunded liability owed to employees and retirees would more than double to $3.846 trillion.