This post from earlier this year pointed out the similarity between the federal government’s accounting and financing of Medicare and Social Security benefits with Enron’s accounting and financing of its infamous off-balance sheet partnerships.
This NY Times article reports that San Diego’s municipal government is now facing a municipal reorganization under chapter 9 of the Bankruptcy Code because of its dubious accounting and financing of public pension fund earnings.
Consistent with the government’s prosecution of former Enron executives involved in such questionable accounting and financing schemes, can we now expect criminal prosecutions of San Diego public officials who condoned the same type of accounting and financing practices that have caused San Diego’s current dance with municipal insolvency?
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The parallels with Enron are fair enough.
Do you see any parallels with Houston’s own municipal pension issues?
The Houston municipal pension fund issue is precisely the same as San Diego’s. It’s probably going to take a couple of Orange County-type chapter 9 bankruptcies to prompt voters not to elect public officials who account for future liabilities in this manner.