Over at Econbrowser, James Hamilton has been detailing his concerns about meeting future pension and health care obligations, interrelating them with the subprime meltdown, the derivatives/hedge fund 'problematic', etc. Today, Hamilton points to several contemporary examples — in California, Tenessee, New Jersey — and concludes:
If there were just one or two such stories, one might regard it as a mistake here or a miscalculation there. But the phenomenon is too widespread to be dismissed as accidental. I am forced to conclude that a pervasive feature of modern American politics is for elected officials to lavish benefits on their current power base, promising or in many cases legally obligating the government to make future payments that will prove to be extraordinarily costly to deliver. I conclude that the reason elected officials keep doing this is because that is what voters want.
I have not read Bryan Caplan's new book, but I must say the cover does a nice job of conveying what the issue may be.