.... A number of commonwealths — yes, California, New York, New Jersey, Wisconsin, and Illinois still conspicuous among them — as well as a number of counties and cities, labor under a heavy weight of debt, deficits, and future obligations. The current crisis is the product not of contracts, graft, and patronage — the mother’s milk of early-20th-century state and local politics — but of sweetheart salary, pension, and health insurance deals secured by public employee unions: the mother’s milk of early-21st-century politics. … The result was a coral-like growth of ever-sweeter employment, health care, and pension provisions, extracted from acquiescent governors and legislators in return for financial support and union members helping in elections. Some 88 percent of public sector workers still had defined benefit pensions in the first decade of the 21st century, compared to about eighteen percent in the private sector. By 2008 there was an estimated $3.35 trillion gap between the states’ resources and their pension and health care commitments. Many towns, cities, and school districts were committed to wages and benefits consuming 70 to 80 percent of their budgets. The complexity of the system, along with popular and media disinterest, contributed to the growing overhang. Then the financial collapse of late 2008 and the consequent recession turned a future threat into a current crisis...http://www.hoover.org/publications/policy-review/article/93501
