RUSH: Well, it’s come to this. Los Angeles Mayor Antonio Villaraigosa says all city departments except police, public safety and those that make money’ I wonder which ones those are ‘must close two days a week because of a budget crisis.’ They’re outta cash. ‘On Monday City Controller Wendy Greuel’ we told you about this ‘warned that within a month Los Angeles would be unable to 
pay employees or vendors. She urged the city to transfer $90 million from its reserves. The city’s financial crisis worsened this week after the Department of Water and Power failed to make a $73 million payment to the city. The agency says it needs to raise rates significantly to make such a payment.’ What in the hell has gone on out there? My God, folks, this state is an utter fiscal disaster. The utility can’t pay the civil…? I guarantee you nobody’s not paying the utility. If they’re not paying the utility, they’re getting cut off. What’s the utility doing with the money that people are paying them?
There’s also a story in the stack today that three California pensions are underfunded by a total of $550 billion. That is over a half a trillion. The Public Employee Retirement System in hock, the pension. They don’t have the money. The State Teachers Retirement System, so it’s PERS and STRS, and there’s one other, $550 billion underfunded in the pensions. Now, those people that are public teachers and public employees have been contributing to this. They have directors that oversee both of these agencies to invest and grow the funds in the pension plan. What the hell has been going on? Schwarzenegger ordered this review ’cause he wanted to find out what it was all about. It’s worse than anybody imagined. Somebody at Stanford University did the research, did the study, $550 billion. The City of LA is shutting down two days a week, the utility in arrears for $73 million to the city? And I’ll bet this is only the tip of the iceberg. When you look at the whole state’s fiscal situation, has the whole thing been a house of cards?
Since the left took over and has been running that state, has everything been phony? Have they just been spending money left and right on all their union buddies when that money has never been there in the first place? That has to have been what’s happened. It’s just like what’s happened in Washington now. We don’t have any of the money we’re spending. We don’t have any money to build schools in Islamic radical — uh, Muslim countries. We don’t have money to give ’em health care. We don’t have money to start building roads and bridges. We don’t even have the money to do it in our country. The whole state of California must be a house of cards. I tell you what, I hope you don’t have any LA municipal bonds, folks. Nothing’s worth anything out there. Nothing’s real, $550 billion underfunded pension plan. And these are great and courageous union workers. (interruption)
Snerdley, the official program observer, has a question.
Snerdley wants to know if we’re going to have to pay for it eventually. Yeah, I’ll tell you what’s going to happen. And I’ll tell you why I think some of this is by design. As we have to bail out the states, as the federal government has to bail out the states, what does that mean? It means that local control has failed. This whole process is going to enrich and further expand the already over the top, unacceptable power of the federal government. When we start bailing out states — and that’s the only thing we can do here, with money we don’t have, now your great-grandchildren’s taxes are being spent — that means that whoever is in charge of the federal government when it happens can say, ‘Look, you people of California have proven that you can’t run the show. We’re going to take it over. Now, you’re still going to have a governor and you’re still going to have this, but if you want to do anything, you gotta get us to sign off on it.’ Meanwhile, the federal government is becoming more and more and more unpopular. Yet it is amassing all of this power, and the regime stands to expand itself even further if we have to start bailing out states like California. I’m going to put this $550 billion in perspective. I need to find the story. I’ll do that in a break. But I want to go grab a couple of phone calls here. We’ll start in Sandy Springs, California, with Mark. Great to have you here, sir. Hello.
CALLER: Hey, Rush. Sandy Springs, Georgia.
RUSH: You’re right. We have an antiquated screen. I mean, the font on this thing is like 1988. You know, like those green screen computers used to be? So I’m sorry. I knew there wasn’t a Sandy Springs, California.
CALLER: No problem. The great thing about Sandy Springs is we created the city a few years ago and privatized everything so all our public employees are private contracted employees, we don’t have pension problems. So we’re not going to have the problems they have out in California.
RUSH: What’s the population of Sandy Springs?
CALLER: It’s about 90,000.
RUSH: Really?
CALLER: That’s correct.
RUSH: You got a privatized city that big?
CALLER: That’s right. We are a model.
RUSH: Did you build from scratch or did you secede from Atlanta?
CALLER: We seceded from Atlanta, that is correct, after 30 years of fighting.
RUSH: I remember this.
CALLER: Yes.
RUSH: We had calls from people in your-yet-to-be-named town on this program, I remember that.
CALLER: Well, it’s been very successful so far, and I expect it to just keep getting better.
RUSH: Are you accepting new residents?
CALLER: Sure.
RUSH: You are? You say you got good health care there?
CALLER: We got some of the best hospitals in the country here.
RUSH: Well, I didn’t have to fly all the way to hell’s half acre. (laughing) It’s right there in Sandy Springs, Georgia.
CALLER: That’s correct. But, Rush, I wanted to talk about our Treasury clown, Geithner, going out through Asia with hat in hand begging the Indians and the Chinese and wherever else he’s got to buy our debt. I don’t think people really can conceive exactly how much $1.5 trillion is, and that’s what our deficit is projected to be this year. And we’re issuing, you know, 75, a hundred billion dollars of new debt every week, and after a couple of bad auctions, all of a sudden he’s off to Asia and China, you know, begging ’em to buy our debt. If they don’t keep buying our debt… I mean, you keep saying, ‘We don’t have any money. We don’t have any money.’ They are our bankers. They’re the ones who are providing us with the money to pay our troops, to pay our bills, to build our roads, to do whatever it is the government does. And if they stop buying our debt, Treasuries are going to get hammered and it’s going to be Jimmy Carter years all over again —
RUSH: Yeah, I know.
CALLER: — but this time on steroids, and that’s just going to lead to massive tax increases. Even Volcker was out there yesterday saying we need a VAT tax and an energy tax. We gotta do something about these deficits, but they’re not going to do anything about it.
RUSH: No, because the problem with the deficits is not taxation and insufficient taxation. The problem with the deficits is out-of-control spending by the regime.
CALLER: Right. And they’re not going to do anything about it. It’s just going to be worse, and — as you say over and over again — it’s gotta be by design. And one more point I would like to make.
RUSH: Quickly.
CALLER: I’m all for breaking up these big banks and stuff, but the mainstream media line is that Wall Street took over Washington. That’s wrong. Washington took over Wall Street, and now they’re using Wall Street to take over Main Street.
RUSH: Exactly right. Excellent timing. That’s a great call from Mark in Georgia.
BREAK TRANSCRIPT
RUSH: All right, let’s put this in perspective out there: $535 billion shortfall in the state pension plans at the state Public Employees Retirement System, the state teachers retirement system, and one other; $535 billion is more than the gross domestic product of Saudi Arabia, Sweden, Switzerland, or Poland? Saudi Arabia is an oil giant. I thought every sheik had $535 billion, but they don’t. Five-hundred-thirty-five billion, unfunded, underfunded pension, how does this happen? And also on a related story: ‘The pension plans at General Motors and Chrysler are underfunded by a total of $17 billion and could fail if the automakers do not return to profitability,’ and they aren’t. Obama Motors reported a first quarter loss of $4.3 billion. Now, what the hell was the bailout if not to protect these pension plans? Wasn’t the bailout of GM and Chrysler essentially to make sure that the unions health care plans stayed intact? What did they do, forget to fund the pensions? They bailed out these companies, what, 25 or $50 billion, they’re still $17 billion underfunded in the pensions?
Now, back to California. $535 billion. It was never real. It could never have been real. The money supply in California could never have been real. They were spending money they never had. It’s almost like the House Bank back in the old days in the late eighties. It didn’t matter what your salary was, you could write a check for an unlimited amount on your account and never get an overdraft notice. It sounds like this is the way the libs in California have been running the state. How come these state pension plans, which include health care, are so expensive, and yet the federal health care system is going to be so cheap? How can the two be in the same sentence? ‘Well, yeah, we’re going to reduce the deficit by a trillion dollars with Obamacare.’ Yeah, right. Uh-kuh. And yet just the public employees in the state teachers in California pension, underfunded $535 billion. The truth of the matter is, nobody’s gonna notice if LA closes its offices for two days a week. They’re only going to shut down ‘nonessential’ people right? If they’re not essential why are they there in the first place?
Remember when they closed the government because of snowstorms a bunch of times in Washington and 240,000 nonessential people were told don’t show up, including Congress. If they’re nonessential, why do you employ ’em? Now, they are going to have a problem. There will be people that will notice LA shut down for two days a week, and that will be the poor who line up for their benefits. They’re going to be lining up in front of closed offices. Remember the Rodney King riots? There was a line that they were using in the State-Controlled Media after the Rodney King riots. They called the people standing in line for their welfare checks ‘an example of the indomitable human spirit.’ (interruption) Oh, the poor get their checks through direct deposit now? Well, what if you don’t have a bank? (interruption) Everywhere? Even if you don’t have a bank, they start a bank account? Look, I’m just going to tell you something. Snerdley, if you’re telling me that people don’t line up at welfare offices all over the country, they do. And that’s who’s going to notice it when LA shuts down for two days a week, otherwise nobody will. Now, wait ’til these health care mandates kick in in California. I mean, you think it’s bad now? Wait ’til the Obama health care mandates kick in out there, because the states are going to have to pick up the tab. Because of the health care bill, the states are going to have to pick up an ever increasing share of Medicaid and Medicare.