I thought I’d go for a hat trick with three posts on broken promises.

Zero Hedge had an interesting post on the role of consent decrees on municipal budgets. Many promises have been made to guarantee funds without providing a way to get those funds. Some have been made by voters in the past, and some by the legislature.

Now that tax receipts are going down the drain, its extremely difficult to provide the level of funds promised to various programs. Raising taxes is also difficult in states like California (home of some of the most outrageous spending promises).

We have legal obligations that make it hard to reduce spending. We have laws in place to make it difficult to raise additional revenue. Absent a bailout, these two forces will collide in California this year.

As an aside, how is it that California still manages to drift $2 billion into the red every month? It doesn’t matter what anyone does, somehow a combination of overestimated revenue and underestimated costs ends up adding $2 billion to our tab. Sometimes we get to go a couple months before figuring it out, though. Thought we skipped two months? No worries, this month we discovered $6 billion in red ink.