The first step in a 12 step program like Alcoholics Anonymous is:
Admission – We admitted we were powerless over our problem – that our lives had become unmanageable.
That’s what’s happening to state and local governments as a result of a new accounting rule that requires them to disclose the long term health care obligations they are accruing. Since many of thesentititeses are promising their employees lavish health care benefits in retirement, the numbers are huge.
Rather than following the next 11 steps methodically, expect a good number of governments to dramatically cut their benefits packages. State and local governments are starting to realize they have a lot in common with GM.November 23, 2005