California's debt crisis

Debt at the national, state and local levels has mushroomed in recent decades. Three California cities have sought bankruptcy protection and there are constant rumors that more may soon follow.

Among the problems impacting California cities are the huge debt obligations owed to CalPERS, the state’s public employees’ retirement system. For example, Stockton, one of the bankrupt cities, is paying CalPERS roughly $29 million a year, in addition to payments being made to other creditors.

Despite passage of a so-called “balanced” budget last June, a report by the California Taxpayers Association pl...