Steven Greenhut on the Specter of Bankruptcy Haunting California


Credit: Hakan Dahlstrom / / CC-BY

The most optimistic pension reformers had hoped that the decrepit city of Stockton, California's 2012 bankruptcy would be a "day of reckoning" — a point where the city's leaders would pare back overly generous retirement benefits and embark on a road to fiscal responsibility. But as often happens with government-reform efforts, observes Steven Greenhut, the pessimists turned out to be right. Earlier this month, the Stockton City Council approved a plan that restructures debt and fully funds the California Public Employees' Retirement System, thus leaving pension benefits for city employees unscathed.