Just when you thought the financial news couldn’t get any worse … .

It just did.

Government at nearly all levels is staggering. Budgets are out of whack, the federal government has a huge and growing deficit, revenues are down, actuarial tables suggest nothing but growing entitlement costs, including pensions to former government employees.

The list goes on and on.

Add to it a new concern. A big, new concern almost no one had in view.

According to the Empire Center of New York State Policy, governments across this state have some $200 billion in health benefit obligations to government retirees and have set aside approximately zilch to meet those obligations.

In perspective, the $200 billion is closing in on the total $264 billion indebtedness of the state and its counties, authorities and localities.

The bonded debt, of course, is owed to the bondholders. The medical benefits are owed to the retirees. What if push comes to shove? The bond owners win, right? Well, that’s what credit analysts offhandedly seem to think. But the state constitution may guarantee the pension benefits. Which puts the whole indebted mess to wobbling because, suddenly, New York taxpayers could soon owe almost twice as much in unsheddable costs than anyone previously thought.

As the recent mortgage meltdown demonstrated, it wouldn’t be the first time so-called credit analysts had failed to do their due diligence in assessing risk.

Why does it matter? Because the ability of New York governments to meet their obligations is central to the fiscal health of the state and its citizens. Meeting those obligations may require some combination of severe cuts in services and substantial increases in taxes. A wave of defaults would make it increasingly costly for the remaining government entities to borrow to carry on the usual business of government, whether short-term cash needs or long-term borrowing for infrastructure improvement or repair…

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