A telling illustration of austerity’s causes and effects: a tragic failure to think beyond the short term eventually necessitates painful reforms

What Austerity Looks Like

JEREMY ROZANSKY

Bankrupt San Bernardino’s new, skeletal government

Three interconnected forces brought the working-class, inland Southern California city of San Bernardino to insolvency: 

• a burst housing bubble and lethargic economic growth; 
• high police and firefighter salaries mandated by the city’s charter; and
• compounding pension obligations. 

Bankruptcy should give San Bernardino leverage to deal with the last two, but the big, structural changes required will not be easy or pleasant. 

Absent such changes, though, salaries and pensions will continue to grow faster than the city’s revenues, crowding out most other government functions and services. 

San Bernardino offers a telling illustration of austerity’s causes and effects: a tragic failure to think beyond the short term eventually necessitates painful reforms.

Read more: www.city-journal.org