California faces gloomy new year

The non-partisan Institute for Truth in Accounting has released its latest report on California (PDF), and it makes grim reading indeed. Not only is California so deep in debt that default or bankruptcy might seem a blessed relief, it appears the accounting gnomes in Sacramento have been engaging in the MSU Method of Accounting. Yup, they’re Making Stuff Up again.

Among other such inabilities of these accountants to use their calculators and spreadsheets accurately, the report found $81 billion in off-balance sheet retirement liabilities in the 2009 financial report. That bears repeating. The official report neglected to include $81 billion in pension liabilities. Apparently, the gnomes preemptively decided that such trifling sums were scarcely worth bothering about and separated them from the budget itself. While I’m sure political considerations and calculation were the furthest things from their minds when they misplaced that $81 billion, more suspicious types might suspect the entire thing is a deliberate fraud upon and misrepresentation to the taxpayers.

Read the whole article.

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